Finance minister P. Chidambaram had asked the real estate developers to cut down the prices of apartments and houses but property developer DLF refused to scale down its prices.

The finance ministry had asked for such a move because of the falling demand but the Chairman of DLF, KP Singh said that since the economy was seeing a slowdown the prices have already been cut in the past one year and now the government should play its role."The government has to ensure through regulatory mode and policy to facilitate larger supply of housing in the market, then the prices will come down," he added.

Following a slump in demand the company has deferred some projects and laid off some employees rather than lowering the prices to raise its revenues. "In hotels, residential and commercial everywhere, the projects deferred because of lower demand and liquidity crisis," Singh said.

He further said that it is the interest rate that has affected the demand and thus there is a need for cheaper home loans. The government should ensure home loans at 7% rate of interest in order to increase demand in the sector.

Parsvnath CMD Pradeep Jain said that the prices of the ongoing project have already declined and therefore the profits have come down by a substantial amount. He further said that if the land prices do not come down the real-estate prices are less likely to decline. The developers will keep deferring projects unless they make profits.

Jain also feels that a reduction in interest rate will help in boosting the demand and therefore the government should bring down the home loan rate to 7%. He also insisted on banks lending directly to real-estate companies with a suspension period of 18 months for repayment. Also the realty sector should be given a standing in the industry sector so that banks are not hesitant to lend to the sector.

Chidambaram had asked sectors like automobiles, hospitality and realty to consider cut in prices to stimulate growth in the market.