Prices of residential properties in the secondary market seem to have come under some pressure post the demonetisation drive of the BJP government. Few realty brokers and developers FE spoke with reveal that in some cases owners are ready to offer steep discounts between 15-18%.
However, buyers have turned into fence-sitters, bringing sales to a near-grinding halt.
In Mumbai’s western suburbs of Goregaon, for instance, where the price of a 1,000-1,100 sq ft apartment ranges between R1.60 and R2 crore, a 10% discount is available right away. In Delhi, too, secondary sales are believed to have slowed significantly. Kapil Kapur, associate director (residential), NCR market, Knight Frank India, said some reduction in prices could be expected in the secondary market since buyers would be in a position to negotiate.
“We expect some enquiries to start post-January 10, as people who have sold properties earlier would want to save capital gains tax by investing before March 31. Post that we will get a sense of correction but we can expect more bargaining by buyers,” said Kapur.
Shivaram K Shetty, a broker in Goregaon, told FE that sellers are softening their stance. “Almost everyone is ready to offer a 10% discount, but no deal is going through as buyers are hoping for more price cuts. Even discounts of 20% aren’t enough to convince buyers,” Shetty said.
Brokers say the shortage of cash has brought transactions to a halt.
Abhishek Upadhyay, a broker from the suburb of Borivali, says buyers are waiting till the shortage eases. “There is no cash with anyone so there is no question of sales,” he said.
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Both builders and owners of second-hand properties are apprehensive they will lose out if transactions take place without any cash component. As such they are even more reluctant to lower prices.
In Navi Mumbai, too, demonetisation has slowed residential housing sales. In Vashi’s Sector 17, a ready to be occupied, two- or three-bedroom apartment were fetching around Rs 1.95 crore, a couple of months ago. However, Manohar Shroff, partner, Shivam Builders, Navi Mumbai, says customers are not willing to pay more than Rs 1.60 -1.50 crore. “As a result deals are stuck,” Shroff says.