Reasons why real estate prices not crashing in Chennai

There has been much speculation that the real estate prices would heavily come down and crash due to the demonetisation. However, this hasn’t been the case as such. Many real estate developers and builder has as such put to rest this speculation about real estate prices to get adversely affected by the government’s decision to ban and demonetise all Rs. 1,000 and Rs. 500 notes. According to the developers, the expectation of the prices coming down with demonetization is simply a mere exaggeration. The real estate market of chennai in fact has witnessed a recent correction and is presently the most popular and attractively priced real estate markets of the country. Certain experts said that the demonetisation process will result effectively in the interest and lending rates coming down drastically to make the housing sector more affordable for in the longer time period.

With the demonetisation move, the developers have become more cautious about properties and so are the buyers who now think before investing in a good property. The realty sector in Chennai was earlier facing a tough time with the real estate business dropping down to about 25 per cent giving much losses to the developers. Though the situation is still prevalent at present, there is a slow growth in the market with flats in Ayappakkam Chennai and other localities. However, it is still facing various disruptions like the Real Estate Regulatory Authority (RERA) and the Goods and Services Tax (GST). Demonetisation is another great shock for the developers. These moves also ensure protection to the buyers from indefinite delays in construction and possession issues.

Many experts foresee the demonetization move as a beneficial one for the real estate sector and the property buyers. Financial experts have advised developers to launch newer construction projects after few years and concentrate on the ongoing and pending projects. This would be to reap the benefits of demonetization later when it would turn out to be more fruitful for them. The real estate experts are of the view that demonetisation would help them to reduce the cash transactions with the buyers and would also make the realty industry more transparent. It would then also attract foreign investments in the apartments in Ayappakkam Chennai and other top localities of Chennai.

Also, the government would then have to push out the demand for affordable housing units through the reduced interest effective subvention schemes and tax reductions for homebuyers in an effort to compensate for the decrease in the property prices. To add in, it would also have to give incentives to the real estate developers for construction of affordable housing units. And this all to be done by the Government to fulfilling the Affordable Housing for All target by the year 2022 introduced by the Government itself. The middle class section of people then would be beneficial and would get easy access to affordable housing units with the decrease in property prices. The demonetization move implemented in end of 2016 also witnessed a reduction in the interest rate structure for home loans. This is a good relief for the people fail to afford the higher EMIs set on housing loans. This effectively opens up another avenue for those who find themselves priced out of the housing market in metropolitan cities. 

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