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Demonetization: Is It a Good Time for Real Estate?

25 Nov 2016


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Demonetization: Is It a Good Time for Real Estate?The demonetization of Rs.500 and Rs.1000 notes has affected the economy of the entire country. This has resulted in many changes in the buying and selling behaviour of people. Is the move good or bad when it comes to real estate?

 

It is indeed a blessing for real estate, and we shall tell you why with the 5 reasons listed below:

 

1. Cheaper Home Loans

With banks getting huge deposits in a short time, their fund holdings have risen greatly. This implies that banks will be able to reduce home loan interest rates significantly in the time to come. The expected rate of interest is projected to be around 8% in the coming months.

 

2. Higher Demand

With the eradication of black money, most Indian cities will see a price correction of about 15-20%. This will obviously increase the housing demand due to greater purchasing power in the hands of buyers.

 

3. Reduction in Number of Unsold Inventories

The increase in housing demand means the number of unsold inventories may come down. The new project launches are likely to reduce over the next 12 months.

 

4. Transparency

Due to all transactions being carried out in white, the real estate sector will be regarded as a more transparent and trustworthy industry. Furthermore, other regulatory acts such as RERA and GST will also help in bringing transparency and investors' confidence back in the real estate sector.

 

5. Greater Foreign Investments

The demonetisation initiative by the Indian government to improve transparency and governance standards in the real estate sector will boost foreign investments in the country.

 

Given the positives mentioned above, the demonetisation move spells great news for the realty sector in every way!

 

Authored by Goel Ganga Developments, a premium real estate developer in Pune

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