Demonetisation. What memories does the word bring about? Long queues in front of the ATMs and banks. Being forced to use credit and debit cards. Searching the entire house for any leftover Rs 500 and Rs 1000 notes that needed to be exchanged. The spiffy new, if somewhat garishly colored Rs 2000 and Rs 500 notes. There are many more. All these made a huge impact on your financial life. But, none more so than if you were planning to make an investment in the real estate market, by buying a house.
Demonetisation was expected brought the property market to a standstill. As home buyers typically pay 30-40% of a home’s value in cash, the complete vacuuming out of currency from the market was expected to be a big blow to the real estate sector.
However, fears of a post-demonetization property slump have dissipated now. Demand is already picking up. Sales across India’s top 9 cities increased by 19% to 51,715 units in the January-March 2017 period compared to a fall of 20% the previous quarter, according to real estate advisory firm PropTiger. So, it is not as bad as was feared, after all. You can definitely buy the dream home you have been planning for.
A large part of the recovery is being driven by the affordable housing segment whose share of total housing rose 22% owing to its recently received infrastructure status.
The government’s incentives in the form of lower interest rates and a push to affordable housing have also led to an increase in demand for residential units. Accordingly, banks have now cut home loan rates by 8.25-8.5 percent, the lowest level in the past eight years.
The government has also announced an interest subsidy of up to 4 percent for first-time affordable housing home buyers. To an extent, the government is now funding your house, for the first time in India.
Developers are focusing on affordable housing projects to benefit from the attention that even government is providing to the segment. Accordingly, smaller sized apartments and medium sized villas are sprouting up everywhere in Tier 1 metros and even Tier 2 cities like Trichy, Mangalore, Rajahmundry etc.
It is a good time to enter the market. The outlook for prices is stable and there is scope for appreciation in the near future, as there was a vacuum created in in the market. You should, not delay your decision unduly since the prices are realistic and you can expect a good deal for the properties with the builders.
Contrary to rumors that property prices will fall, the market prices have remained stable. But in a few months’ time, prices may begin to go up. Developers who are a little wary of increasing prices immediately will eventually raise the prices as demand picks up.
So, if you are planning to purchase your dream home, you will not find a more opportune time to do so than TODAY.