- Demonetisation has taken a toll on Chennai's real-estate market forcing developers to cut prices to boost sales.
- Developers are offering up-front price cuts amounting to 20 lakhs and discounts on the per sq. feet price of the project.
- The luxury and premium segments are to be the worst hit, and transactions in Tier-2 and 3 cities will suffer as well.
CHENNAI: It is good news for home buyers in Chennai. Prices are finally dropping and if you are keen on buying a home in the city, this is the right time. The Centre’s move to demonetise Rs 500 and Rs 1000 currency notes has hit the property market making it more favourable for the home buyers.
Developers in the city are reported to be cutting prices by up to Rs 20 lakhs on slow-moving projects. Even top developers like Puravankara, Bollenini, KG Promoters, Alliance and Casa Grande are offering discounts on the per sq. feet price to push sales.
“My friends are getting calls about huge reduction i.e., Rs 200 to Rs 300 off per sq. feet which means I can save about 3 to 5 Lakhs and that could take care of my interior decorating costs. I have myself got a couple of emails from builders offering ready to move in homes with discounted prices, equal to pre-launch prices,” says Sharan Seetharaman, a homebuyer.
Real estate consultants claim this is just the beginning and say that we can soon expect a 10-25% discount in the luxury segment and also in high-end areas like Nungambakkam, RA Puram and MRC Nagar where prices average Rs 18,000 per sq. feet and more. Tier II and Tier III cities like Madurai, Coimbatore and Trichy are expected to witness 15% depreciation in prices as most real-estate transactions in these cities are in the form of cash payments.
While a section of homebuyers is very keen to grab such an opportunity, many are planning to wait and watch for home loan interest rates to drop. Realtors predict the rates could go down to as much as 6% thanks to the RBI kitty brimming with money.
Demonetisation is also expected to help developers by helping clamp down on the bribes and corruption that go hand in hand with most real-estate projects.
“It is definitely going to have an impact once this has been done. We see the cost to the developer will definitely come down by 15% to 20%. And I am sure the developer will be wise enough to pass this to the customer,” says Rajesh Dave, a realtor.
Meanwhile, several developers are hopeful that demonetisation will allow the government to give the industry a stimulus, helping bring the real estate sector back on track.
“With this demonetisation, the RBI kitty is going to be richer by at least 10 lakh Crores and this dividend will definitely be given to the Government. And then they need to spend just 1 lakh crore as stimulus and the whole market can recover,” claims Ajit Chordia, Managing Director of Olympia Group.
Whether or not it is the coupled effect of demonetisation and the need to push for sales in an already sluggish industry, the current scenario makes it a good time to invest in real estate in the city. So if you are keen on buying a home, go to your developer, negotiate hard and you will be assured of good deals within your budget.
Edited By Nikhil Narayan Sivadas