- Bangalore's secondary property market to be negatively impacted by PM Modi's demonetisation drive.
- Property registrations have come down to about 200 per day, compared to about 1,800 earlier.
- Primary markets supported by all-cheque deals and home loans to be relatively less impacted
BANGALORE: It has been a week since the demonetization ghost came to haunt us all. India's real estate market is learning to deal with its after effects and the end-user driven market of Bangalore is no exception.
The city is considered a realty haven where most home-buyers are from the IT or corporate sector and invest in the primary market, with homes purchased from developers and financed through bank loans. So it stands to reason that Bangalore may emerge unscathed.
“A white-collar city like Bangalore, where prices are already at the lowest cannot possibly witness a correction,” says Farook Mahmood, CMD at Silverline Realty.
While that may be true, there is no denying that the sudden decline in money supply expected to drastically impact the re-sale market, where profit -taking and commissions are mostly in the form of cash.
“You will see a huge correction especially in the residential market which will be, in my guess, be anywhere from 30% to 40% at current price levels. The velocity of sales will come down, especially in the residential segment. The luxury segment will get affected and the people's decision making will get delayed,” says Juggy Marwaha, MD – South India at JLL.
That is already evident when you look at the numbers from sub-registrars across the city. Sources in the Department of stamps and registration tell NDTV that property registrations have dropped to about 200 per day, compared to the 1,800-odd properties that used to be registered before demonetisation took effect.
Real estate brokers have been particularly affected by this drop in numbers, with many of them being left high and dry
“The registrations are not happening. Hardly about 2 to 3 registrations are going on at the sub-registrar’s office. People are not buying or selling their properties at the moment. And unless properties are registered, we brokers can’t get our commission,” says Irfan a broker at FBN Realtors.
Real estate experts claim that the pressure on the secondary market may see sellers cut prices, causing many home buyers to move away from the primary market, leading to a short-term dip in demand. In that way, Bangalore mirrors the trends seen in the Delhi and Mumbai property markets where transactions have almost stalled thanks to demonetisation. In Mumbai, there's almost a consensus that the high-value, secondary property market could melt by as much as 30% if not more. The impact is far worse in Delhi with ground reports indicating a 25% to 30% fall in prices.
Meanwhile, across India, real estate experts are predicting that speculative investment in the real estate sector will come down, as investors will be unable to use their black money reserves. This in turn may see prices come down as developers correct prices to appeal to the end-user. Land prices too are expected to see a similar trend.
This coupled with recent moves on the establishment of a real estate regulator (RERA) is expected to cleanse India’s real estate sector, bringing home buyers confidence back into the markets while hopefully kick-starting growth once again.
Edited By Nikhil Narayan Sivadas
Hope it falls little more so common man can afford it..
I think house bola want to spread some junk messagse. Whatever they are publishing is completly wrong. If they are telling the prices are coming down they have to tell the builder name old cost and new cost. So that buyers like us can go and buy .. Instead of that every day releasing article saying delhi prices went down, bangalore prices went down…. Where is the proof. I dont know how come NDTV is having tie up with these junk sites…. God only know.
Good question? But know one will have answers for the common man like us…
Have some sense. There are 100's of builders, do you expect them to put up prices for all of them?
Ha Ha…. Its just a week and too early to draw any conclusions !!! Need to wait and watch for a month more to see real impact on real estate market. Its no doubt that the apartment prices are very high and they need serious correction whereby a common man can afford to buy one for their living. Its time to give back to society by realtors.
All BOGUS NEWS…. NDTV is hand in GLOVE for writing False NEWS. Even Today every ones know how Real ESTATE builders have Squeezed the Blood of Salaried Employees luring them to buy from them.. NDTV provide right informaiton.
Leave another 2.5 or 3 months, one can buy a house a giveaway price, no need to rush, a great collapse id in the offing. these realtors will tell all sort of things defending, never believe them just wait, some of them may not be there in business, they may vanish…
Vanakkam
It is good for the people. I should fall even more. Nandri
Holding capacity is too high in a city like Bangalore as people have money / multiple properties so none will sell for less in secondary market untill they are very badly in need of money and in primary market no builer will ever reduce prices all these % are just for discussions
Most builders borrow money to complete their projects. they have to pay interest on the money. they need to sell quickly to get their money back. prices will fall.
I am from Bangalore. Was in search of property from last 8 month. I know market trend and I also know there is no dip in the property prices. As. Of now every builder is quoting property prices will not come down in Bangalore. For property buyer it's wait and watch game.
Yeah true i am watching the market from the past 3 montha in Bangalore.. The builders are bullishing the customers that rates will not fall down further and claiming that they are giving vrry competative rate.. This is wait and watch game..
I am looking to buy home from long time. After demonitzation with lot of expectation as every one is speculating that prices will come down, I checked with few real estates companys in Bangalore. The price they quoted was the same. The price dint change before and after demonitization. I belive reputed real estate companies will not lower their price as most of them will not be much effected with the demonitization.
The price will come down since the actual cost on stamp papers and buying cost is having very much diiference If total cost of the property is payed in white money (through bank) surely price will come down atleast by 25%-30%.
Builder will ask to pay in foreign currency transfer
For affordable housing sector demonetization will not give much impact because majority of the people will choose to deposti the money in bank which will help the banks to cut down the interest rate and making it easier for people who wanted to buy a house or apartment with bank loans . Global developers offer <a href="http://www.globaldevelopers.info/villas-in-sarjapur-road/4">villas in sarjapur road</a> at very affordable costs .
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