Will Property Get Cheaper Due to Demonetization?
Apr 14, 2017 Real Estate News
The surgical strike on black money may help the buyer to buy the house of their dreams. Most of the transactions related to property take place with cash and almost 20to 50 percent of the payment is done in cash.
Demonetization has made the availability of liquid cash scarce. Undoubtedly, it will affect the sales in real estate market. If the land prices get affected and reduce, then it is expected that the prices of real estate properties will decrease too. The secondary market will have a much greater impact on this decision. They essentially involve the ‘cash’ involvement and demonetization will affect the secondary sales badly.
The CARE ratings reported that developers are already facing a demand crunch which has led to the rise in demand for inventory. Experts have pointed out that the real estate market can see a further decrease in demand for the property. The surgical strike on black money may impact the demand and buyers will postpone their plans of buying the property.
This can drive the developers and seller to lower the property prices. This may turn out to be a good time for the buyer willing to buy the property and move into the ready-to-move properties. Sellers will be willing to negotiate the prices and lower the prices of the properties.
Another likely effect of demonetization is the cut in interest rates. Banks are overflowing with the cash from customers and they will have to reduce the deposit charges from the customers which will lead to lowering interest rates. Banks that have more liquid cash will look forward to the sanction more loans, further reducing the interest rates on home loans.
Banks like State bank of India, ICICI bank, HDFC bank have reduced their home loans as much as 10 basis points to encourage people to buy the property of their dreams at this point.
Many developers are launching affordable housing projects with no frill. This will be a good time for the buyers who have been priced out to buy the property. Further, the involvement and introduction of RERA will help the buyers with the transparency in the property deals.
Demonetization has made the availability of liquid cash scarce. Undoubtedly, it will affect the sales in real estate market. If the land prices get affected and reduce, then it is expected that the prices of real estate properties will decrease too. The secondary market will have a much greater impact on this decision. They essentially involve the ‘cash’ involvement and demonetization will affect the secondary sales badly.
The CARE ratings reported that developers are already facing a demand crunch which has led to the rise in demand for inventory. Experts have pointed out that the real estate market can see a further decrease in demand for the property. The surgical strike on black money may impact the demand and buyers will postpone their plans of buying the property.
This can drive the developers and seller to lower the property prices. This may turn out to be a good time for the buyer willing to buy the property and move into the ready-to-move properties. Sellers will be willing to negotiate the prices and lower the prices of the properties.
Another likely effect of demonetization is the cut in interest rates. Banks are overflowing with the cash from customers and they will have to reduce the deposit charges from the customers which will lead to lowering interest rates. Banks that have more liquid cash will look forward to the sanction more loans, further reducing the interest rates on home loans.
Banks like State bank of India, ICICI bank, HDFC bank have reduced their home loans as much as 10 basis points to encourage people to buy the property of their dreams at this point.
Many developers are launching affordable housing projects with no frill. This will be a good time for the buyers who have been priced out to buy the property. Further, the involvement and introduction of RERA will help the buyers with the transparency in the property deals.
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