With the speculations going on about the status of real estate after the Demonetisation move, Surfaces Reporter is publishing CREDAI's stand on the subject and would be bringing froward more news from the segment.
“There are rampant news articles about there being a correction in pricing of real estate by various opinion makers who seem to think they have the authority to make such claims. As an industry body representing organised real estate, we again reiterate that the industry has always been catering to the primary market which comprises of end users who aggressively avail home loans. Moreover, with this step of demonetisation, banks are again going to be flushed with liquidity of approx. 15 lakh crores and will be compelled to lend aggressively .To do that ,they will have to lower interest rates. Demonetising currency has also removed surplus liquidity from the market which will result in reducing inflation.
“With a liquidity of over Rupees 15 lakh crores, Home loans interest rates will be lowered and a faster growth in housing sector is in the store," says Getamber Anand, President, CREDAI clearing the air upon rise and fall of property prices.
We expect that the RBI would definitely, in the coming months, reduce REPO rates by at least 2% so that a home loan can be brought down to at least 7%. The home loan rates coming down to such levels of sub 7% in the next year or so, the atmosphere will become more like the west where home loans are available at 5% and below. Unlike the western countries, India has a documented shortage of housing and homes, an aggressive domestic demand for real estate. This essentially means that in presence of a lower home loan interest regime, a larger pool of home buyers will be able to avail loans to buy the home they always wanted. This could be made possible in as soon as the next six to twelve months. Housing industry will start to grow at a rapid pace while concurrently being in compliance with transparency and fair practices like RERA.
We appeal to potential home buyers to understand the long term effect and benefit of this great move and not be misled into believing that property prices will fall. Currently the real estate market is at its best possible price point with no further margin with the developers to reduce prices. Now it is the responsibility of financial institutions to enable home buying during such an optimum scenario.”