Despite the fall in the number of land registrations post demonetisation, city realtors representing CREDAI (Confederation of Real Estate Developers Association of India) claimed that the sector remains unaffected following the ban on higher currency notes.
According to CREDAI members, 95 per cent of the Hyderabad market consists of mid segment housing and the buyers are mostly employees who avail property loans.
Since there is no cash component in the transaction, the demonetisation has no effect on prices of residential housing, they said.
The members also said that most of the credible builders are taking loans from banks and also entering in to joint agreements with plot-owners leaving no scope for the use of cash in the construction projects.
S Ram Reddy, President, CREDAI Hyderabad said the demonetisation will benefit the sector as housing loans can get slashed from existing 9 per cent to 6.5 to 7 per cent due to the huge inflows to the banks.
“The much awaited RERA (Real Estate Regulation Act) bill will come into force from May 2017 and there is going to be short supply of housing stock in the market and as a consequence of this shortage, the real estate prices will go up.
Also, the effect of a GST coming into effect from April 2017 is that the prices would increase on account of non-availability of a service tax set off as well as increase in the rate of tax rate,” Mr. Reddy said.
He predicted that the property prices might increase by 10 to 12 per cent after the implementation of RERA and GST and advised people to buy property soon.
P Ramakrishna Rao, General Secretary, CREDAI Hyderabad said that the usage of cash will become minimal during transaction in purchase of open plots and second hand homes due to demonetisation.
He was also confident that the property prices in the city will not decrease.
The CREDAI members informed that they will give representation to the government for reduction of stamp duty and also income tax on capital gains so that the cash component is further reduced in real estate transactions owing to the lower taxations.
