MUMBAI: Ever since PM Modi kicked off demonetisation, the country has been still struggling to come to grips with it. India’s property markets, in particular, have been the worst hit, with many calling it a surgical strike on real estate, thanks to a large number of cash transactions that take place here.
NDTV interacted with several prospective homebuyers to understand how they are feeling about demonetization and its impact on real estate. Most of the people we met had planned to buy property in the next couple of months, but have now placed their plans on hold. Here are a few of the responses that we received –
“I am sure that property prices will come down and not just me, but a lot of my friends who were interested in buying a property have also postponed their decision. We just want to wait for some time and see how the government reacts and plan it has. Based on that, we will decide what to do. But I am not going to buy a house for the next 2 to 3 years for sure,” says Prakash Mishra, a homebuyer from Delhi.
“I personally feel that this is not the right time to buy because the market is not down. Even in my own business, there is a drop in footfalls. So personally this is not the right time to buy because we will see drop in prices, if it is affecting my business it will affect the property market as well,” says Sandeep Dhwan, a homebuyer from Thane.
“When demonetization happened I was bit happy because there are now high chances that rates will fall by at least 30%. Demonetization will also help me as interest rates will come down and also the burden of the home loan will be less,” says Sanjeev Seth, a home buyer from Navi Mumbai.
Based on these inputs, it seems like the average homebuyer is especially wary about investing in the property markets today. And while real estate developers are hoping that the markets will stabilise in the next 6 months, these homebuyers are determined to wait it out much longer. Here’s why:
- Many homebuyers expect demonetisation to bring property prices down. Meanwhile, developers say that will not happen, making it a waiting game with both sides waiting to see who will blink first.
- The influx of money into the banking system has homebuyers hoping that interest rates will be reduced further, making it easier for them to take home loans.
- And finally, homebuyers are waiting for black money to get squeezed out of real estate, which they believe will the process of buying property much easier for people who want to go for all-cheque deals.
This is sure to come as a dampener for developers who have been ruling out price cuts, claiming that only the secondary, resale markets will be affected. But real estate experts say there will be a domino effect with falling prices in the secondary market drawing homebuyers away from the primary, developer-driven market.
Most experts agree that demonetisation will only strengthen India’s real estate market in the long run by making it more transparent, thus bringing homebuyer confidence back into the system. Homebuyers are also counting on the establishment of the Real Estate Regulator (RERA) in all states this year, a move that will go a long way in making the real estate sector more accountable and homebuyer friendly.
Edited By Nikhil Narayan Sivadas