A couple of leading city-based developers have also sent confidence letters to their customers, assuring them prices will not see any correction and it will be sold at the prices quoted to them. “Many people are trying to get out their property investments as these properties might not be accounted for and the government could next crack down on such property markets in the black money crusade,” said a senior official from a leading developer. The customers, however, are confused and are waiting for some more clarity before making any decisions,” said Navin Raheja, owner of Raheja developers. This is because the sluggishness in the market over the last few months has already corrected the price and there is hardly any scope for further correction. But we haven’t seen any such developments in the last few weeks at least in the primary sales,” said Santosh Kumar, CEO (India operations) at Jones La Lasalle (JLL). “The property rates in south Delhi have been affected, which affects the Gurgaon property prices directly as customers would rather invest in Delhi than Gurgaon,” said the sources.
The resale market or the secondary market has also been hit significantly, say the people from the industry as there is a liquidity crunch in the market and people are trying to sell their properties.
According to industry sources, the luxury segment, however, with properties in the range Rs 2 to 3 crore have been hit considerably due to demonetization. Some of the leading developers are giving away free maintenance, club memberships and even furnishings.
This does not mean that the developers are not taking the customers for granted and many are giving their customers sops and incentives to keep them hooked to their properties. The luxury market and especially the resale market, however, is likely to see a correction in the prices.
An expected reduction in home loan rates though is likely to be good news for developers and customers. “If at all there is a correction in the land prices, there might be an effect on the end product,” he said.
Developers say that the initial reports over a likely reduction in residential property prices have left the customers confused who are now waiting for the economy to get back on track. He said in some places, where circle rates are higher than the market rates, there is a limited scope for undisclosed transactions. “The prices are already at the lowest possible levels leaving no margin for us to reduce them any further (particularly at the affordable housing segment level).
There was an initial speculation that demonetization would result in correction of prices in the residential property markets. he affordable housing market is unlikely to see any significant price correction due to demonetization, according to developers.