6 ways how demonetisation affects real estate positively

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1) Home Loan interest rate will be reduced ( possibly to 7%) since Banks are infused with lots of money. EMI will reduce and customers can pay half his EMI with the rent. For ex. For a 30 Lakh loan, EMI will be Rs 23,000 per month (for 20 years) and rent will be Rs.11,500 per month.

2) There could be housing shortage as new projects may not be launched for at least 1 year as approvals may be delayed. This may further reduce supply and the demand for existing residential properties may go high.

3) Govt fiscal deficit will reduce and tax collection will be higher and this will boost infrastructure spending.

4) Foreign Direct and Private Equity investment in Real estate will increase leading to better liquidity for projects and this will enable Developers to complete their projects on time.

5) Adding to this, RERA will ensure protection for home buyers as well as timely delivery.

6) To add to Demonetisation benefits , victory of Trump as US President will boost NRI Demand as protectionism may set it in the US and many NRI may look at relocating to India.

- article written by Ranjeeth Rathod, Managing Director, DRA Homes and the insights shared are his own perspectives.

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