No scope for price correction in realty

Mumbai: Hopes expressed in various quarters, including the ruling BJP, that residential property prices would fall  post-demonetisation has been debunked by real estate developers who said all home loans buyers  should beware of being ‘misguided’ by opinion makers who are claiming that property prices will fall.

“At the end of the day, the current real estate prices in the primary segment are at their lowest with no further scope for correction,” said CREDAI

The association is the apex body for private real estate developers in India, representing over 11,500 developers in 23 states.

The impression was that with the black money quotient eliminated costs would come down. While asking home buyers not to be “misguided by opinion makers who are claiming that property prices will fall,” the association maintained that once the immediate liquidity shortage is overcome, demonetisation would spur huge activity in the home buying space by end users who will be aggressively availing home loans.

Explaining the situation, Ashutosh Limaye,  head, research, Jones Lang LaSalle, that specialises in real estate, said that firms practising professional financial  services  and ethics do all transactions by  cheques and they are not worried by this  move. It is usually the smaller or C-class developers as they are called, on the fringes of big cities who accept cash compensation and give super discounts, that will suffer and their projects will suffer. They are the ones who will have to revise prices downwards to get  buyers and will be washed away unless they instituionalise the way they work.