Towards its end 2016 left a mixed bag of sentiments for the real estate sector. November the 8th was a historic day when PM Narendra Modi announced the demonetization of 500/1000 rupee notes which stopped being a legal tender to bring in a stop to black money. While the notification of RERA in several states brought cheers demonetization left the industry wondering about the consequences. However amongst all this chaos affordable housing segment showed considerable improvement.
Renowned developers offering a set of affordable property options continued to perform well in different markets. Despite all uncertainties related to demonetization and other reforms, affordable housing market did not show a downfall. The Real Estate market will definitely shed off dark clouds in 2017, especially the affordable housing segment. With demonetization a lot of money has come back into the banking system which is helping in lowering the banking rate and surely cheaper rates is more housing absorption.
The primary market – or specifically, the market formed by projects taken in by reputed builders and developers in 8 major cities has remained more or less unaffected. This is because buyers into such projects take the home loan/financial route to buy their homes and transactions are done through legal channels. Therefore there is no major impact on sales in this segment. In the last year there have been major changes which are positive, in the Indian Real Estate.
RERA, Benami Transaction Act and Demonetization are a few reforms which take the real estate sector forward and are helping it lose most of its taint. Primary Market, the rumored decline of this segment is far from reality, because the primary market consisting of ready to move homes and new projects cater to the end-users whose primary source of funding is banks and other financial institutions.
Simply put, it is the home loans which finance such properties. This segment is totally insulated from currency ban. The trend now emerging points towards a recovery in buying sentiment, with serious buyers already returning to the primary market. Real estate developers with transparent business practices have not been affected by demonetization, and have in fact witnessed growth in sales.
The bottom-line is demonetization has already resulted in major reduction in home loan rate interest rates, and they are expected to reduce further. Developers offering discounts and good deals are maintaining their positions in the market which is now ideal for serious end users.