In a surprise move to curb black money, corruption and terrorism, prime minister Narendra Modi on November 8 announced scrapping of old currency notes of Rs 500 and Rs 1,000 as legal tender from circulation resulting in cash crunch and chaos aross various sectors including real estate.
The government's latest move of demonetsation is set to bring interest rates on home loans down whereby resulting in rise in demand for homes.
Moreover, real estate companies believe that 'Affordable Housing' segment will get boost in turn encouraging more buyers to own home.
According to one real estate developer who declined to disclose his identity, here are five tips/myth busters for buying property post demonetisation.
1. Myth: Real estate prices will crash post demonetisation
Myth Buster: Demonetisation will have an impact on the current interest rates imposed on home loans. The interest rates have decreased resulting in a rise in demand for homes as housing will become more affordable. This increased demand will eventually lead to competitive prices.
2. Myth: It’s better to invest with developers offering flexible payment schemes
Myth Buster: Flexible and lucrative payment schemes can be tempting but can also have negative consequences. There is a possibility of liquidity on the developer’s end due to these schemes.This liquidity results in delays which could result in increased cost for the buyer in terms of rent. Thus, always consider a developer’s past records and credibility before going with such schemes.
3. Myth: It is better to go with developers offering reduced prices
Myth Buster: Reduced Prices offered by some developers tend to be more beneficial to them rather than buyers. Construction quality can be compromised in this case due to slashed prices, which can be disadvantageous for the buyer in the long run. However, reputed builders do not follow such practices, and it is important to conduct thorough due diligence about a developer’s past records and credibility before falling for such schemes.
4. Myth: It’s better to go for an under construction property for ease of payment
Myth Buster: Under Construction Properties may provide ease of payment. However, they possess some risk of delayed possession and not receiving what was initially promised. It is better to go for a ready or near ready possession property to gain benefits on reduced home loan rates, income tax benefits on a home loan and yield immediate rental income.
5. Myth: It is not an investors market as far as real estate is concerned
Myth Buster: Demonetisation is set to bring about some positive changes in the real estate market. The reduction in the current home loan rates post demonetisation will provide more income tax benefits to buyers which will make housing more affordable. Affordable housing will incentivise the investors to put their money in the real estate market.
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