A top official from a leading independent global property consultancy, Knight Frank India has come up with a new statement regarding the prices of residential properties in Cities will down in the coming years due to notes ban. The company said that the demonetization effect is completely showed an impact on the prices of City’s residential houses.
Knight Frank Executive Director South, Satish BN Told, “We expect the prices of properties in the Cities will come down in the range of 10-12% depending on the builder, locality and stage of construction. Demonetisation is going to affect the city’s real estate market quite significantly in Q4 of the current fiscal.
Satish said, “Bangalore is said to be one of the most strong real estate markets of the country, has come under large pressure in last two years after reaching a peak in 2013. In h2 2016, the new launches were declined by 45% year-on-year while sales volume dipped by 27% year-on-year.”
“While launches were already on a weakening due to factors like increasing unsold record, BBMP’s (Bruhat Bengaluru Mahanagara Palike) drive to oppose the violation of lake beds and other issues like the announcement of notes ban in Q4 of the current fiscal, further led to curbing of new launches. The South Bengaluru has seen the highest launches and sales mainly due to affordable budgets, employment hubs, and social infrastructure and upcoming metro connectivity,” Satish added.
As per Knight Frank India Analysis, North Bengaluru saw an increase in new launches by a substantial of 31% in H2 2016, from 25% in H2 2015, sales decreased to 18% in H2 2016 from 25% in H2 2015. The East Bengaluru saw new launches declining to 18% in H2 2016, from 27% in H2 2015, when the sales volumes see a slight increase to 27% in H2 2016 from 26% in H2 2015.
Irfan Razack, Prestige Group Chairman, said, “There are no possibilities of prices down. We don’t agree on this. Developers work on wafer thin margins of 8-10%. I guess that if there is an analyst in supply, the prices can go up.”
Satish also claimed that big builders who have a huge portfolio are struggling to sell one or two apartments a month. After the demonetization, public mindset changed and they followed wait and watch schema. If I am a buyer, my focus should be on completed projects rather than under-construction projects.