Nearly three months after the announcement of demonetisation, the real estate business is yet to recover from the slump in the capital region where demand for residential properties has gone up much earlier.
Now, for the realtors and builders who incurred huge losses due to poor sales, the post-budget season is the only hope.
Anticipating a cut in the interest rates on home loans, realtors are expecting the trade to boost once the Union government reveals budget plans.
“We are hopeful that the overall sales would pick up after a month or much before depending on the budget. As of now the sale of medium range apartments is normal as the majority of the buyers purchase through bank loans. But the sale of high range properties and plots came to a halt,” said B.V. Sudhakar Reddy, managing partner of Suchira Projects, speaking on the sidelines of Price Protection Property Show organised by the Capital Region Builders’ Association (CRBA) in the city.
Wait and watch mode
“As there are chances of home loan interest rates coming down in future people are in a wait and watch mode, and it takes one more month for total recovery. However, for properties worth ₹35 lakh to ₹40 lakh there is no issue as buyers pay 20% in cash, a small amount, and avail 80% as loan,” said P.V. Prasad, deputy manager, SBI home loans.
According to realtor B. Srinivas of Sri Vaishnavi Builders, trade in Ajith Singh Nagar, a new destination for realty business, came to a halt post demonetisation. “There has been no progress since then and we are looking forward to the budget announcement which only can help the sector bounce back.”
“Though we planned to purchase a home in the city the prices are exorbitant and unaffordable. Now we are looking at properties in the suburbs. We expect further interest cuts in a couple of months as the banks in the country got enormous deposits post demonetisation,” said R. Prakash, a visitor at the property show.
Prices stable
At present banks are offering loans at an interest rate of 8.50%, the lowest. However, the prices of properties did not come down drastically due to the slump in sales. A double bedroom flat in about 1,250 square feet of area costs more than ₹40 lakh in areas like Ajith Singh Nagar. In the areas near Tadepalli and Poranki, the prices of similar flats are between ₹ 35 lakh and ₹45 lakh depending on the location.
