Real Estate prices may further see a significant drop as Center designates 130 Red Zones for no activity post May 3– stalling the business.
Humankind is going through a difficult phase with the rapidly spreading COVID-19 pandemic. There is no doubt that the Post Covid-19 world would be much different and will change the face of human society forever. However, one sector that is likely to get a major blow from it would be real estate. Speaking at the webinar organized by Naredco, HDFC Chairman Deepak Parekh said the prices of property in Delhi and across the nation may crash up to 20 per cent in the wake of lockdown.
Developers, however, say that government support in terms of lowering levies could assist the real estate companies to sustain in this pandemic and may arrest a prospective fallout.
President of the National Real Estate Development Council (NAREDCO), Niranjan Hiranandani talked about lowering prices only on the condition of a change in the Income Tax Act for not levying fines if the property is sold below the circle rate.
Otherwise, it would attract taxation challenges for both, buyer and seller, he added. According to Raj Jain, Project Head of New Modern Buildwell, prices may fall in the short term, which would stabilize later. Furthermore, there could be delayed decision making and capital expenditures by prospective investors and homebuyers due to a global impact due to COVID 19 pandemic.
Nevertheless, demand and price for the completed property in Delhi-NCR and other metropolitan regions may rise substantially with a period, but that for under-construction projects the demand will slow down.
Hiranandani noted that post lockdown sales would be buyer sentiment and wouldn’t just depend on the factor such as “reduce prices for sales to happen”. Thus, there is a need for lower interest for home loans and reduced stamp duty, he added.
NAREDCO recently admitted a loss of over Rs 1 lakh crore so fare since the lockdown. Given Delhi has recently been declared as a red zone in India, the property in Delhi are likely to bear more losses in the future.