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Realty hit hard; homes to get cheaper

People who have made investment in the property market will have to wait for long before the market bounces back, it may be good opportunity for end users to buy property given huge inventories.

SNS | New Delhi |

If you thought real estate was a safe investment that never went down in price, you might well have to change your opinion.  With the government's decision to scrap all currency notes of Rs.500 and Rs.1,000 in circulation, real estate prices are set to fall by up to 30 per cent, real estate watchers say. This may well be good news for end users as homes will become cheaper and more affordable. But the real estate, known for parking black money, will be hit very hard. The ongoing projects of many builders are likely to get delayed. Anuj Puri, country head of the leading real estate consultancy firm JLL, said that the prices of secondary market would come down but the commercial space and the primary market was not likely to see much impact. The government's move to wipe out black money from the market will push down the prices of land along with other properties, market watchers say. They point out that the prices in the secondary market are set to fall drastically as most of these transactions happen in cash.

People who have made investment in the property market will have to wait for long before the market bounces back. It will be a good opportunity for end users to buy property given the huge inventories available with builders. The prices may come down by 20 to 30 per cent, say realty sector watchers. Real estate prices in Mumbai and NCR have been stagnant for two years. High property prices and piling up stock have kept the buyers away from the market for the past two years. The builders have been holding inventories for 46 months. Now they will be forced to sell at lower prices, according to many experts. However, the Confederation of the Real Estate Developers of India (CREDAI) doesn't see much impact on the builders. “We don't see primary market getting disturbed as our inventories are sold to the end users who avail of home loans, ” said CREDAI President Geetambar Anand  Nonetheless, the real estate developers are likely to find it difficult to sell new houses as consumer sentiments will remain weak for quite sometime. There won't be many takers even for the ongoing projects, sources pointed out. Consumers waiting for their delivery of the dream home too will be at the receiving end.

Anjul Tomar/thestatesman.com