While the demonetisation initiative by the Central government means further delays in ongoing real estate projects due to the massive cash crunch, it also paves the way for a cleaner and more transparent real estate industry in the times to come.
Namrata Pande Srivastava- MD of Evente clinic Singapore says “The real estate sector is expected to get cleansed of its ailments in the due course of time owing to the elimination of black money clubbed with multiple regulatory changes such as the Goods and Services Tax Act, Real Estate (Regulation and Development) Act and amendment of the Benami Transactions (Prohibition) Act. Subsequently, project approvals will be quicker and deliveries faster”
However prices are unlikely to fall, especially in the primary market. In most cases, developers will not be willing to cut prices as cost for development may increase. A large component of unaccounted cash goes in paying labourers and small suppliers. Now, they will have to move white because of lesser cash or because of more scrutiny, etc. Hence, overall costs will only go up as they have to pay service tax on those components,.
Experts believe that property prices are not likely to reduce sharply as predicted. The sales drop is temporary and short-lived. As liquidity in banks improve, banks will be compelled to lend aggressively. To do that, they will have to lower interest rates hence resulting in a surge in the willingness to invest.
To sum it up there is little room for any major price cuts due to rising input costs, and also given that property prices in key markets have remained stagnant due to a three-year slowdown in the real estate sector. So now is as good as any other time to buy real estate.
Evente clinic strives to bring it’s NRI clients best deals and opportunities to buy real estate. In such a volatile market we hope to stand with you and guide you through your investment decisions.
To know more please do visit The India Property Fair, Singapore 2017 on the 11th and 12th of February @ The One Farrer Hotel and Spa.