No sharp correction in Pune house prices after demonetisation
Prices of houses in Pune have shown no decline in the post-demonetization days.
The home prices had decreased in the quarter of demonetisation in Pune and Pimpri Chinchwad, before it started to reverse again. In Chakan, the prices increased more steeply in the demonetisation quarter(October to December). The trend is based on the actual market data put out by the RBI-backed National Housing Bank (NHB), an NHB official said.
The Residex data -India’s official house price data -shows that there were no benefit of demonetisation on prices of homes. This was contrary to expectations of a sharp cor rection after 86% of currency in circulation were sucked out of the system.
The hope was that home prices will correct by as much as 30% as cash component.But as over 85% of pre-demonetisation cash levels have been achieved, there is little hope of any steep price correction.
The NHB survey shows that under-construction projects across board quote higher prices. The assessment prices as quoted by banks and financial institutions are more in sync with market trends and also cover the actual sale and resale prices.
“Banks and financial institutions maintain their own database and use the same to finance projects and homes,“ a senior NHB official said.
In Pune, there was an increase of prices in the highend and value segment underconstruction housing projects. On the other hand, the affordable segment saw a minute correction in the January to March quarter. The study includes price survey of 18,814 homes in the Pune city limits. In terms of assessed prices, there was a slight increase for affordable homes and budget homes, while high-end homes became cheaper.
In Pimpri Chinchwad and Chakan, there was a slight increase in prices of both underconstruction and ready-to-sell properties during the January-March quarter. In both places, market prices of over 27,000 units were collected to reflect the price movement.
Experts say that home prices are unlikely to correct in a major way in the future because the developers are likely to drop supply drastically as they focus on to complete projects rather than spreading their resources too thin, as in the past.In any case, that did not bring down prices either.