Impact of Indian Currency Change
on Real Estate
For All Govt.
policy and lower housing rates
will give boost to the real estate market
• Home Loan will
be available on Lower rate
o Due to huge cash deposit in the bank account. The
collection is expected to cross Rs. 10 Lac crore. The bank will be having all time high
deposits the liability to pay interest on the deposit bank have to give loans
to in the market. As the bank can only earn by lending money to the borrowers
which leads to reduction in the home loan rates the current home loan rate
offering by banks and financial institutions are around 9.10 to 9.25. which is
also expected to come down by another 1-2% in coming time ahead. Which results
in more home loans will be distributed for buying real estate. Bank loan can be reduced to the prevailing
rates any time during the loan period by giving application to the financial
institution which small conversion fee.
It wlil give more confidence and affordability of buying
property to the buyers
• Good News for
End users/Real Buyer
o Interestingly their will be
positive impact on Primary market and good news for end users or real buyer who
can only buy property availing the home loan. The first time Home buyer who is
living on rent or what to relocate on new location will be positively benefited
due to reduction in price and clear transaction/deal.
• Good News for
Builders and Real Estate Projects
o There is a good news for builders and real estate
projects due to better transparency in the system. When the secondary market
will be get effected the buyer will
prefer to buy from authentic real estate developers who have good track record
and deliverability. The builder will accept 100% white and the buyer is also happy to
pay consideration amount through cheque and home loan. Long term their primary market will
grow rapidly .
• Adverse Effect on
Secondary Market / Resale
o Due to Change
in Indian currency the most effected
market will be the Secondary Market which is also know as resale market in real
estate. The properties of Resale will be
effect badly due to involvement of un accounted money (cash) in the
transaction value. Now the seller have to accept the 100% white in transaction
and needs to pay the capital gain tax to the govt. Other wise the cash which was the major
portion and component of resale properties can not be converted into new
currency due to limit of exchange policy of the govt. i.e. Rs. 4000. The
rates are expected to decrease by another 15-20%.
• Benefit of
implementation of RERA (Real Estate Regulatory Authority bill).
o Implementation of RERA will give confidence to the
buyer of timely delivery / possession as well as the clear transaction deals.
Due to many clauses on conditions on the
developers related to the non diversion of funds from one project to another
and heavy penalty on account of delay
possession, buyers will fearlessly take the decision of buying the underconstuction properties
and projects. Buyer will get home loan on lower rate and able to manage his
lower EMI with more confidence. The decision making will be fast which give
boost to the real estate market.
•Big Boost to
o Inflation will come down , govt tax
collection will be on all time high, govt will have more funds to build roads &
infrastructure. The FII( Foreign Institution Investments) inflow will be more
the GDP (Gross Domestic Product) will grow
faster the ever before, maximum use of plastic money or online
transaction for sale-purchase.
Conclusion : Lower home loan rates and implementation
of RERA will give confidence to take fast decision for buying property in
primary market by end user. Due to low inflation the buying power of money will
be better the rates. Cost of
manufacturing will come down. Which results big boost to Indian real estate sector