A labourer stands on a truck carrying construction materials at a construction site of residential buildings in Noida

MUMBAI (Reuters) – Indian property shares fell on Thursday after commerce and industry minister Piyush Goyal asked developers to cut prices and offload inventory instead of waiting for the market to recover at a webinar organised a day earlier.

The real estate sector has been pressured by a lack of liquidity for both developers and buyers due to the shadow banking crisis and changes in tax rules, among other factors, over the past few years.

The Nifty Realty index slid 1.72% at 0720 GMT, compared with the broader market’s 0.9% loss.

“The market will not recover in a hurry. Things are seriously stressed and your best bet is to sell,” Goyal told developers.

“Those who have sold should leverage less and get rid of bank loans and survive the downturn. Those who are saddled with loans and holding on to prices have suffered,” he warned.

The National Real Estate Development Council had sought $200 billion in reliefs to help the industry weather the impact from the coronavirus pandemic. Analysts said the liquidity crunch and unsold inventories in the sector could potentially lead to defaults on loans and worsen the $120 bad debt with banks.

Goyal said the government was trying to bring about some concessions in the ready reckoner rate – the minimum price at which a property must be registered – to help buyers and the industry but advised builders to sell even if that did not happen.

“You can be stuck with inventory and default or get rid of whatever you quoted at high prices. Consider it a bad decision and move ahead,” he advised.

So far, the government has allowed a six-month extension in completion timelines for real estate projects and extended a credit link subsidy scheme for the middle income group by a year until March 2021.

But Goyal said developers cannot expect the government to finance them to the extent that they can hold out longer until the market improves.

(Reporting by Swati Bhat; Editing by Jacqueline Wong)