The real estate industry seems to be going through some turbulent times in Ludhiana as per reports that have been released by the NHB (National Housing Bank). The reports indicate a hefty drop in prices of residential housing units in Ludhiana for the January-March, 2017 period. According to the National Housing Bank, out of the 50 cities which were assessed, 27 cities saw a heartening improvement in property prices in the quarter concluding in March, 2017 as compared to the quarter ending on December 2016. However, 19 of these cities witnessed a drop in property prices.
Ludhiana witnessed a fall in property prices to the tune of 7.8% as compared to property prices in December, 2016. Delhi witnessed a drop in property prices by 4.3% while Gandhinagar and Surat witnessed property prices dropping by 12% and 8.9% respectively. Property prices also fell by 7.2% in Kolkata. Realty experts have stated that there are several factors working behind this drop in property prices and the major reason is demonetization.
Post demonetization, people did not possess enough cash for purchasing property since their money was mostly tied up across banks. Also, traders were hugely concerned with regard to GST since they were concerned about business operations and did not focus on property purchases. This has led to a drop in property prices as per experts. The main reason is also the negative market sentiment in the Ludhiana real estate market and this has been prevailing on account of documentation related complexity for builders after GST. Developers have stated that it is very difficult to obtain the NOC (No Objection Certificates) and other documents and this is preventing them from launching new housing projects/colonies. Developers have4 also added that with the new government firmly established in the state, they are expecting more simplified procedures and systems for the real estate sector.
Several buyers have also confirmed that demonetization and GST together contributed towards creating a scenario where they did not wish to purchase property. Several buyers were planning to purchase land or apartments but post demonetization, parked their cash in the banks. Additionally, several businesses have taken a hit due to these twin moves of the Government, thereby taking a toll on the surplus funds available with business owners for investments like property purchases.