Needless to say that real estate sector has been reeling under huge debt of unsold inventories along with a stagnant growth. But with the Government norms like several rate cuts by RBI, RERA, GST, now currency demonetisation, real estate is expected to move in a positive direction. As the property prices and home, loan interest rates are expected to come down. But there is a doubt how much these assumptions or expectation will be fulfilled? And will all these moves result in the upliftment of the real estate sector or bring darker clouds.
Experts are in view that the primary sector and the affordable housing sector will not be affected. But the secondary market and land dealing will get affected the most due to the presence of cash flow in transactions. On this Pawan Jasuja, Director, Finlace Consulting said, ” House is one of the basic need of the public. Around 68 million Indian require independent housing (as per the study by NHB-NIBM). The major part of this demand is affordable housing. Due to Demonetization or Benami property, there will be hardly ant effect on affordable housing as since last 3 years real estate is on down side and now the rates are the lowest level. There is hardly scope available for further correction. Going below this rate will result in non-delivery of projects. Yes, there will be a major impact on properties with very high market value with very low circle rates, because that creates a gap for cash money.”
However, it is also said that this is the best time for buyers to buy properties. Because the property prices are all time low and there are very fewer chances of price correction as well. But the affordable property prices are expected to rise if the housing demand increase. Jasuja further added, “For affordable properties, no further decrease in price is expected, however, due to lower home loan interest rates sales will increase. Land, independent houses where there is a major gap between circle rate and market rate cash is involved in saving stamp duty and tax liabilities, the prices may go down.”
Although these aspects signal towards positive days of the real estate sector but one question still remains that whether the industry will be able to stand up again with this huge blow. “Due to demonetization all businesses are affected also Govt. policies clarity is still awaiting due to GST etc. Many buyers feel that post demonetization property rates will go down drastically, they are keeping their decision on hold. So there is a big hit on real estate. However as soon as clarity comes, buyers will be back in marketing since a house is a primary need. It is expected that things will start moving within a quarter and more clarity will be in 5-6 months,” shared Jasuja.
These moves are definitely good for the sector but right now the real estate sector have been hit very hard due to the presence of black money. But in the long run, the sector will get benefitted as well as the buyer and investors.