Real estate business to be down by 30 percent due to demonetization
Posted on: 26/Jan/2017 3:13:55 PM
According to Fitch Ratings has mentioned that in the coming year the real estate business can be affected by 30 percent due to demonetization.
Fitch Ratings statement has mentioned: The rates of the houses will come down. House prices will decline this year because demand for residential property has weakened significantly in the fourth quarter of 2016.In the coming financial year 2017-2018, the results of the first quarter will be very worst. We can expect that there can be some improvement in the second quarter. Since the third quarter of the year is a festive season, there can be sales of new houses.
Moreover the banks have reduced the house loans interest by half a percent. Hence there are chances of recovery in the real estate business. The number of houses sold in the fourth quarter of 2016-2017 fell 44 percent. Selling prices in the Delhi Region where unsold houses is the highest over 16 quarters of sales, followed by Mumbai, where it is 10 quarters.
NCR is known to have the largest cash-based real estate business in the country. Though the sales of houses became less in the major cities, the demand for houses in Chennai and Pune was less affected. The construction business was greatly affected due to demonetization. Most house builders have been able to work around practical issues related to making payments to suppliers and contractors. However smaller house builders across the country have started offering discounts of around 25 to 30 percent to attract buyers.
