BENGALURU: Developers say currency recall will eventually help cut home loan rates and drive better sales. As apartment sales take a further hit from demonetisation, leading real estate developers say the current patch of slowdown is only a passing phase and things will bounce back in about three months. A small group of developers ET spoke to believe currency recall will eventually help cut home loan rates and drive better sales.
“This is indeed a good move by the government and we do not see any negative impact on the real estate industry in the city barring this quarter,” said JC Sharma, Credai Bengaluru president, and vice chairman, Sobha Limited. The move, he added, will result in lower lending rates, making housing more affordable to all.
The market in Bengaluru has seen a correction recently and is one of the most attractively priced markets in the country, according to Irfan Razack, chairman and managing director, Prestige Group. “This announcement ensures that while bigger players will continue to gain ground, smaller but organised developers will get a level playing field giving rise to a healthy competition and a high quality delivery of projects,” he said.
All this, according to him, is expected to make the industry more systematic, robust and reliable creating an atmosphere that is conducive to foreign direct investment, institutional investors and the like.
“This (demonetisation) would lead to interest rate-sensitive sectors like real estate to expand growth through high sale volumes in a totally new environment within the ambit of the Real Estate Regulatory Authority (RERA),” said Ashish Puravankara, managing director at Puravankara Projects. “We believe that this will fundamentally push for uniform pricing in real estate, thereby boosting consumer confidence, transparency and trust in the sector.”
Transactions have been affected be cause short-term market is driven by sentiments rather than reality. “There will not be much activity for the next one or two months. However, in the long run, affordable housing will do well as home loans are expected to be cheaper,“ said Damla Mathew, MD at Damden Group, a mid-segment developer.
However, the CEO of a real estate firm said the confusion and the implementation mess post-demonetisation combined with RERA regulation have played a big negative on the sector. “Home buyers are waiting in the wings to see if prices will fall further. In my opinion, it will take at least six months for things to settle down,” he said, not wanting to be identified. “The sector is in a holiday mode now,” he added.
A government official confirmed that property registrations have dropped.
Abhishek Goenka, Partner & Leader (Real Estate), PwC India, said the market in Bengaluru has stabilised in the recent past and is far from its peak growth. “Nevertheless, it continues to be one of the top real estate markets in India considering the robust demand from IT and e-commerce sectors.”
Credits ET Realty