After Demonetisation Master Stroke by Our Prime minister Mr Narendra Modi, there was quick warning in the real estate market that Housing rate or prices will collapse across the Indian market. It is true that real estate sales had slowed down due to anxiety of customers about demonetisation.
The Budget Speech of the Honble Finance Minister Shri Arun Jaitley was eagerly awaited by real estate as an industry and he has come up with some policy related points which augur well for the industry, in turn making things better for the home buyer. Banks are flush with funds post demonetization, home loan rates are down given this situation, the Reserve Bank of India (RBI) Governor Urjit Patel is likely to hold rates during the second monetary policy review after demonetization of old Rs 500 and Rs 1,000 currency notes.
One, the banks are reducing home loan interest rates. Secondly, global crude prices are firming up. Between these two, and what the Honble Finance Minister said in his Budget Speech relating to real estate, the RBI will most probably maintain status quo, said Dr Niranjan Hiranandani, CMD Hiranandani Communities and Founder-President, NAREDCO (West). For home seekers, the slim chance that the RBI Governor might spring a surprise and reduce the rates even by 0.25 bps might well be advantage home buyer, said Niranjan Hiranandani.
The advantage of the slim chances scenario is, if the RBI reduces rates, it will have a direct impact on home loan interest rates and EMIs, hadded. However, given the current scenario, I am not sure we will see a rate cut, in all probably, status quo will be maintained, he said.
Dr Niranjan Hiranandani pointed out that this Tuesday will be the second monetary policy review after demonetization of old Rs 500 and Rs 1,000 currency notes. The RBI Governor, in his first policy review in October had reduced the repo rate (short term lending rate) by 0.25 per cent. The second policy review was no changes. The RBI has cut repo by 1.75 per cent since January 2015, pointed out Dr Niranjan Hiranandani.
For a home buyer, the impact of demonetization of Rs 500 and Rs 1000 notes on home loan interest rates have been positive, and we look forward to home seekers dream homes becoming a reality with home loans on offer at lower interest rates, Dr Niranjan Hiranandani concluded.
Dr Niranjan Hiranandani is Founder & MD, Hiranandani Group. His recent initiative is Hiranandani Communities. He is the Founder and First President (Maharashtra), National Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing & Urban Poverty Alleviation, Government of India.
After Budget 2017, flow of enquiries and walk-ins are back to normal due to government announcement about reduction in tax and infra status to affordable housing. The “Regulation and Development act” of real estate has helped people to gain more trust and transparency and 2017 will be a great year for real estate sector.
Demonetisation is an excellent move results into lot of liquidity into the system, which will only promote growth.
For short term period, People had experienced Discomfort and Pain. In fact it’s a kick-start to housing industry. RERA will bring lot of confidence in home buyers. It’s a win-win situation for both buyers and developers. Only genuine real estate developers will survive and real estate sector will experience clean and transparency with a proper process structure. Both Demonetisation and RERA have pushed real estate sector in a positive way.
There was quick warning in the real estate market that Housing rate or prices will collapse across the Indian market after demonetisation. It is true that sales had slowed down the realty market for some time but there was no impact on price points. In the Long term Property Prices will not drop down to 20% to 30% rather it will increase.
Development expenditure to land, permits and construction will rise therefore this increased cost will be passed to the End users. So if cost goes up then prices will go up. The need for land is in great demand with this increasing population. Housing units are being occupied and increasing gradually quarter by quarter that it speaks about the strength or progressive moment of real estate market of 2016 which clears the image of 2017 that occupancy of houses will increase in 2017.
RERA is a gift for the public as well as authentic real estate developers. Every developer launching any residential project has to register it with RERA and upload all the project details to the RERA site before he initiates any sale. So this will bring confidence in buyers while investing money into real estate market and demand for housing will increase because home buyers will not hesitate before investing.
RERA is a blessing in disguise for the entire sector as it will regularize the purchase process. This law will act as a regulator to govern both residential and commercial real estate transactions. As it will become mandatory for developers to post all information on issues such as project plan, layout, and government approvals, land title status, sub-contractors to the project, scheduled for completion with the State Real Estate Regulatory Authority (RERA), the transparency and trust factor will automatically increase A real estate project needs to be mandatorily registered with state real estate authority before it is offered for sale.
Developers cannot sell the project unless the project is registered with RERA and also real estate agents have to get registered with RERA. RERA will be a win – win situation for both, the buyer and the developer. Definitely the confidence by the consumer will be stronger alongside support from investors sitting nationally or globally. RERA will definitely make a lot of expectations come real and “Acche Din” is closer to being a reality.
