Dented by demonetisation, realty buyers in ‘wait and watch’ mode

Bhubaneswar: The ‘white money’ buyers in the realty market appear to be holding back their property purchase plans after the Centre’s demonetisation initiative in November last year. This was the response of majority of aspiring buyers who visited the recently concluded property expo of Credai (Confederation of Real Estate Developers’ Association of India) here and enquired about various upcoming real estate projects in and around the capital city.

Though the Centre, to ease the demonetisation blues has announced incentives in the affordable housing sector and banks reduced lending rates, the genuine buyers in the sector are still in a ‘wait and watch’ mode.

“Yes, the demonetisation has impacted the genuine buyers a lot. It is already two months that the initiative has been taken to curb black money in the country. We believe that the Centre must be analysing now the demonetisation impact on the sector and it will come up with more incentives for the affordable housing sector. We are waiting for that only”, Binoy Kumar Das, a visitor at the expo said.

As announced by the Centre, for the urban poor, in 2017, a rebate of 4% and 3% would be provided on home loans up to Rs 9 lakh and Rs 12 lakh respectively. Also, for the new housing or extension of housing taken up on 2017, a rebate of 3% would be provided on home loans extending up to Rs 2 lakh.

Many who enquired about budget houses in the expo too echoed Das and expect home loan rates of 8 per cent soon as banks are flush with funds..

“Realty market reports forecast it’s just the beginning of a rate cut cycle in India. We can expect further rate cuts in RBI’s next policy review due in February as well as the Union Budget 2017-18. Hopes are high for more rate cuts in near future which will further ease the pressure off the economy and allow greater spending”, Sudhir Mohanty, another visitor, stated.

Credai sources said 25 developers exhibited 100-odd ready-to-move-in projects at the expo which received an encouraging response. In the demonetisation crossroad they hope a bigger percentage of materialisaition of the deals.

Odisha property developers were fighting a prolonged slowdown in sales for the last couple of years and home prices are stable due to ongoing scenario.

"With the rates going down and government announcing sops for budget housing, I feel sales will pick up," said a property developer on condition of anonymity.

Property consultant firm Knight Frank in its half yearly report said, home sales in the October-December period fell 41% from a year ago to 40,936 units across eight major cities in the country, while launches fell an even sharper 61% to 24,316 units.