“New consumer law and sales levy have been far worse than the cash ban!!"—developer.
India's housing sector was Asia's top performer in last 5 years before demonetization, RERA and GST piled on the misery. Cash and illicit monies have been sucked out of the economy. Residential re-sale prices have slid 20 - 25%, new home prices are down 7-17%, while cash payments have halved to 20-24%. Builders are completing projects, rather than taking on new projects, to avoid punitive penalties under RERA. They are trying to sell property when there is already a considerable over-hang.
Supply should have shrunk and prices reached an inflection. But this doesn't take account of another whammy: insolvency resolution of indebted borrowers like Jaypee Infratech will load the market with cheap properties. Expert says land prices will fall from Feb 2018, and developers will be building cheaper property and selling them in 2019 & 2020. That is really good news for ordinary people.
Lenders ask NBCC to develop defaulters' land
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Lenders reckon land is worth more when it is developed. They have the money and believe there is a huge appetite for property going forward. In this way, not only do lenders recover most if not all their monies, but it stops promoters gaming the system — ie. bank’s loss reduces promoter’s loss, but promoter’s gain is only his. It’s an opportunity for one party to get back the losses. This is because properties fell due to a squeeze on liquidity and not due to an economic downturn. In fact, if govt actions lead to higher growth in the economy, as is likely, it will create a very lucrative scenario for properties.
India's housing sector was Asia's top performer in last 5 years before demonetization, RERA and GST piled on the misery. Cash and illicit monies have been sucked out of the economy. Residential re-sale prices have slid 20 - 25%, new home prices are down 7-17%, while cash payments have halved to 20-24%. Builders are completing projects, rather than taking on new projects, to avoid punitive penalties under RERA. They are trying to sell property when there is already a considerable over-hang.
Supply should have shrunk and prices reached an inflection. But this doesn't take account of another whammy: insolvency resolution of indebted borrowers like Jaypee Infratech will load the market with cheap properties. Expert says land prices will fall from Feb 2018, and developers will be building cheaper property and selling them in 2019 & 2020. That is really good news for ordinary people.
Lenders ask NBCC to develop defaulters' land
—————————————————————————
Lenders reckon land is worth more when it is developed. They have the money and believe there is a huge appetite for property going forward. In this way, not only do lenders recover most if not all their monies, but it stops promoters gaming the system — ie. bank’s loss reduces promoter’s loss, but promoter’s gain is only his. It’s an opportunity for one party to get back the losses. This is because properties fell due to a squeeze on liquidity and not due to an economic downturn. In fact, if govt actions lead to higher growth in the economy, as is likely, it will create a very lucrative scenario for properties.
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- Nov 13, 2017
- Nov 13, 2017
- Lenders feel that land is worth more when it developed — that there is a huge appetite for property going forward. In this way, lenders hope to recover most, if not all of their monies.
REPLY Nov 26, 2017
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