'Interest rates to come down, right time to buy property'
JC Sharma, MD of Sobha Limited
tells us the impact of Demonetisation on consumer demand and hosuing supply. “With supply side getting constant demand which is likely to improve in the near future and declining interest rates, it’s the right time to buy a property,” says Sharma.
He also talks about problems such as high stamp duty, insurance on property, road infrastructure, water and sewage connections that need to be tweaked to make Bengaluru real estate market, the face of Karnataka. Here are the excerpts of his conversation with Neha Nagpal.
Your views on demonetisation and its impact on the market.
The announcement was one of the boldest moves and an unexpected one since the independence. This decision has impacted every person and every sector. The Prime Minister has expressed that there will be short term pain till 30th Dec 2016 before the demonetisation effect gets stabilised.
There is a consensus that economy may slow down on a short term basis and that its impact may continue in the next quarter. However, most of the people also believe that this decision will give boost to the cashless and digital economy. Demonetisation is expected to bring down interest rates due to the excess liquidity in the banking system. This decision needs to be welcomed.
There are four critical policies and announcement declared– Demonetisation, Benami Transactions Act, GST and RERA. What has been their impact on prices and what is the expected impact over the next six months?
Out of the four critical policy announcements made by the Government, only demonetisation has had a direct and immediate impact. Other 3 announcements remain work-in-progress and their impact is yet to be felt. So far there has been no impact on prices.
Hopefully, in the next six months’ time both the RERA and GST will come in force. This will have huge structural transition and will ensure better compliance, high revenue, more transparency, giving competitive advantages to organised players like SOBHA.
Is this the right time to buy?
Housing in India is yet to take off in a big way. The changes, which this Government has brought in recent times, will ensure that non-serious players either transition themselves to remain relevant or lose out by NOT embracing such changes. With supply side getting constant demand which is likely to improve in the near future and declining interest rates, there has never been an apt time for home buyers to buy their homes when prices remain stable in the last couple of years.
Has the market slowed down now and will falling interest rates bring consumers back?
The first half has shown great promise and we are confident that the interest rates in the second half will be significantly better. However, demonetisation has temporarily impacted the sales.
We are confident that this a passing phase and next phase will be better when new budget will be presented by this Government before Feb’ 2017.
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