Ban on 500 & 1000 Rupee Note: Time is Right to Buy Property
Apr 12, 2017 Real Estate News
The government’s move to demonetize 500 and 1000 rupee notes has arrived as a shocker to the realty sector in India. For starters, the real estate market witnesses continuous cash flow (including black money) day in day out and this surprise move by the government to ban high denomination notes has certainly affected property selling business in the country. However, the said ban has come as a boon for potential home buyers who were waiting for housing prices to correct.
Ban will bring down property prices:
Real estate has been an easy pass for those wanting to park their black money. However, as a result of the union government’s decision to ban 500 and 1000 rupee notes, there will be a steady reduction in the cash component of real estate transactions. This will give a push to a large number of genuine home buyers in the primary as well as the secondary market rather than the property investors only willing to consume their black money.
Observers suggest reduced cash transactions will help to bring down property prices by as much as 25 percent. Moreover, the recent slowdown in realty sector will only encourage developers to offer more discounts in order to get rid of the piled up inventory. Hence, it is an excellent time to buy property for those people who have been long willing to buy a house of their own but just couldn’t due to high property prices.
Adding to the home buyer’s delight, major lending banks such as State Bank of India and ICICI have reduced interest on home loans by as much as 125 basis points over the last one year.
The implementation of the Real Estate (regulation and development) Act 2016 is one of the key factors to improve the ailing real estate market in the country. In order to protect home buyers, several states including Gujarat and Uttar Pradesh have introduced the RERA Act that seeks better transparency and accountability in the realty sector coupled with monetary compensations to home buyers for delayed possessions.
Inventory pile-up: Good Opportunity for home buyers
The lackluster response to new as well as ongoing projects has given rise to piling up of inventory with the developers. However, a large number of unsold properties will only give more choice to the home buyers. According to the data supplied by Knight Frank, new launches in 2015 fell by a steep 21 percent points. Developers, facing the issue of unsold flats and low capital, are offering several discounts coupled with ready possession flats. Hence, with all these offers and reduced home loan interest rates, time is right to buy a property.
Ban will bring down property prices:
Real estate has been an easy pass for those wanting to park their black money. However, as a result of the union government’s decision to ban 500 and 1000 rupee notes, there will be a steady reduction in the cash component of real estate transactions. This will give a push to a large number of genuine home buyers in the primary as well as the secondary market rather than the property investors only willing to consume their black money.
Observers suggest reduced cash transactions will help to bring down property prices by as much as 25 percent. Moreover, the recent slowdown in realty sector will only encourage developers to offer more discounts in order to get rid of the piled up inventory. Hence, it is an excellent time to buy property for those people who have been long willing to buy a house of their own but just couldn’t due to high property prices.
Adding to the home buyer’s delight, major lending banks such as State Bank of India and ICICI have reduced interest on home loans by as much as 125 basis points over the last one year.
The implementation of the Real Estate (regulation and development) Act 2016 is one of the key factors to improve the ailing real estate market in the country. In order to protect home buyers, several states including Gujarat and Uttar Pradesh have introduced the RERA Act that seeks better transparency and accountability in the realty sector coupled with monetary compensations to home buyers for delayed possessions.
Inventory pile-up: Good Opportunity for home buyers
The lackluster response to new as well as ongoing projects has given rise to piling up of inventory with the developers. However, a large number of unsold properties will only give more choice to the home buyers. According to the data supplied by Knight Frank, new launches in 2015 fell by a steep 21 percent points. Developers, facing the issue of unsold flats and low capital, are offering several discounts coupled with ready possession flats. Hence, with all these offers and reduced home loan interest rates, time is right to buy a property.
