Realty Updates – Page 17

Due to Demonetisation there are lots of question arising in mind of homebuyers, whether property price will be down or not? Home loans interest rate will increase or decrease in upcoming year and many more. According to today’s scenario some builders are assuming that real estate sector is driven by sentiments rather than reality. It may be possible due to demonetisation, for short period of time real estate market will go down but for long term there will be not affect. For coming 2-3 months property prices may be decrease, you can say this sector is in holiday now. But it will take 6 months to get things settle down. There will be huge change in terms of property price as well as in home loan interest rate.

If customers are waiting to see property price will fall then they should know the truth behind the Demonetisation impact at residential and commercial property. A small developer group said to ET (economic times) that currency recall will help to cut home loan interest rates and drive good sales. This is actually a good move by the government and we do not see any negative impact on the real estate industry.

Delhi-NCR is likely to have the highest demand in LIG, MIG and HIG segments in the period 2016-2020. Delhi/NCR continues to save the highest ratio of demand of 24 percent at around 1 million units by the end of 2020.
LIG housing is the most under-serviced segment, below Rs 15 lakhs. While the LIG is probable to generate demand of about 1.98 million units by 2020, supply by private developers is going to be just 25,000 units.

Similarly, though the MIG (Rs 15-70 lakh) accounts for 63% of the total housing supply across eight cities between 2016 and 2020 at 647,000 units, the demand is likely to be a much higher at 14,57,000 units. Lack of funds and high land and development costs are the primary reason for developers not choosing for smaller sized units closer to city centres as profitability radically reduces.

There is a considerable ratio of unsold inventory in the MIG and HIG types, which are not engaged as these properties are unable to demonstrate value for their buyers. Such units fall out of preference either on account of higher-than-expected prices or due to locations.

Delhi-NCR is expected to have the highest demand in all the three segments in the period 2016-2020. However, a majority of the supply is likely to cater to the HIG, followed by the MIG and LIG.