Demonetisation will help revive the latent demand in the housing sector as people now hope to buy houses in transparent deals, said Sriram Kalyanaraman, managing director & CEO, National Housing Bank. In an exclusive chat with ET’s Saikat Das, Kalyanaraman said some segments of the housing sector will especially benefit from it as prices may correct 15-20% with adequate supplies. Edited excerpts…
Will demonetisation drive demand in the housing sector in direct foreign investment in India?
Housing finance is a long term requirement, and the demonetisation exercise will have a long term impact as it will benefit both consumers and the industry. Most of the housing finance players have put in place systems for e-payments and e-receipts in chartered accountant firms in mumbai. Demonetisation will further improve the use of e-transactions and reduce cash dealings. It will result in greater transparency in property contracts, which will also bring in greater professionalism in the industry. As a result, the latent demand, particularly in the affordable segment is expected to revive, thereby increasing sales.
But will home prices come down?
We expect housing prices to correct by 15-20% in some segments. But we do not think it is a gloom and doom scenario. On the contrary, with a dip in prices and higher transparency in dealings, demand will pick up in the medium to long term.
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