PANAJI: After the demonetization announcement and with the Real Estate Regulation Act (RERA) waiting in the wings to make an entrance, numerous aspiring home seekers across the state are stuck in a dilemma. Conflicting views and statements that the cost of real estate will fall drastically has made first times purchasers wonder whether to put the money down or whether to wait for prices to come within their comfort zone. The real estate sector however finds no reason for prices to fall, especially for reputed projects.
“I don’t expect prices to come down substantially in low income and middle income housing,” director of Kamat Infra Tech Bharat Kamat says. CREDAI – Goa members assert that given the prohibitive land cost, high compliance and tax charges and a limited supply of land for development purposes, the price of real estate projects would remain more or less stable.
“There has been a lot of talk that post demonetization, real estate will become cheaper. People are talking about developers making huge margins and laughing their way to the bank, but this is all nonsense,” a reputed builder said. Builders do not seem to be in agreement on what a first time buyer should do. While some builders argued that now was the best time to purchase a flat, others advised a wait and watch approach.
“There is a lot of uncertainty. It is best that if somebody wants to buy that he waits for clarity on GST, RERA and demonetization,” Kamat said.
Co-founder and director of Milroc Good Earth Property and Developers Kantipudi Kulasekhar has a different take on this. “If the need is there, then a buyer should go for it. In the last two years, the market has been dull and builders have taken a hit. Prices have not risen all this time so it’s unlikely they will fall now,” Kulasekhar said.
A reputed construction company agreed that prices would remain more or less stable except for those projects that were either promoted by fly by night operators or where the prices had already been increased through speculation. “Buying such a project even if the builder gives 30% discount would mean that the project does not have much value or that the prices were jacked up to start with,” the builder said.
“Prices will drop where there is unrealistic pricing. There are certain projects which are not realistic and they will now see a correction,” Kulasekhar added.
Once RERA is in place, it will infuse a positive sentiment among buyers but will also increase compliance costs and thus only cause prices to climb up for the end consumer.
Credits ET Realty