Residential Market Shrugs off Impact of Note Ban

Housing market across the top 30 cities of India have successfully shrugged off the crash of note ban and soaked up the temporary blow of various changes in regulations in order to formalize the realty market.

The real estate markets quickly started showing recovery by the end of September as sales showed the best performance within the five quarters. Around 22 of the leading 30 markets either improved their last peaks or stayed around their best in five quarters by the quarter-ending September. All the cities successfully bounced back from the losses due to demonetization, according to the reports of Liases Foras Real Estate Rating & Research.
 

Increasing change in quarterly prices
On average, around 3.1% hike has been witnessed in prices from October to December 2017. In this quarter, the performance has witnessed the significance as the government implemented two major reforms in this time. The government announced the most anticipated RERA Act, 2016 in May and the nation also moved to a never-seen- before indirect tax rule when Goods  Services Ta (GST) has been rolled out on July 1. According to Propindex, a trend calculation tool by Magicbricks.com, around 3.1% of hike was estimated in Oct-Dec 2017 quarter in 46% of 750 neighborhoods in 14 mega cities in India. The National Price Index (NPI) from Magicbricks witnessed first price hike in July-Sept 2017 quarter after the rest of stagnant for up to 2 years and it kept on going in the quarter of October to December with 1% of increment.

The sales volume in Mumbai, NCR, Pune, Hyderabad, Bengaluru, and Ahmedabad and other tier 1 cities was at the best levels of five quarters in September. On the other side, tier 2 cities like Bhopal, Vadodara, Bhubaneshwar, Kanpur, Nashik, Mangalore, Rajkot, and Thiruvananthapuram also recorded the best sales over the past five quarters, according to the data. Along with the move of note ban by the government, the implementation of GST and RERA will also help improve the levels of transparency and compliance in the industry and it is all set to boost the confidence of homebuyers.