Consumers expect fall in home prices
Housing finance firms downplayed stress in the real estate sector as fallout of the sudden demonetisation early last month in meetings with regulator National Housing Bank, but fear consumer sentiment expects prices to fall, and that could hamper home sales in the coming months, crimping growth, multiple sources familiar with the matter told.
In the past two weeks, NHB has held three meetings in Delhi, Mumbai and Chennai with 81housing finance companies to assess the impact of demonetisation.“We have held regional level conferences of housing finance companies (HFC) assessing the situation in light of demonetisation,“ Sri ram Kalyanaraman, CEO of NHB, told. “We also discussed the challenges and opportunities in this sector and also how the HFCs can work more towards fulfilling the Housing-for-All goal (by 2022).“
Kalyanaraman did not elaborate on the challenges but some parti cipants said they drew the regulator’s attention to escalating consumer expectations on falling prices.Rental yield and mortgage loan yields have fallen to about 3.4% (tax adjusted), which could be a key trigger to rake up housing demand from home buyers living in rented accommodation now, a head of a large HFC said.