Lower interest rate to boost housing in demonetised era: Primarc director

The impact might be felt only in the very premium real estate segment but definitely not in the budget housing segment, says Pansari

Demonetisation is expected to bring down housing loan interest rates by 100-150 basis points over the next six months which will in turn, spur demand for housing in mid and budget segments, a real estate official said on Friday.

"In the next six months, interest rate will come down to 7.5-8% from current level of 9.5% on an average, as an effect of demonetisation," city-based real estate major Primarc director Siddharth Pansari told PTI.

Demonetisation is going to impact real estate prices sharply as is widely believed, but it is not going to be so for budget and mid-segment housing, he said.

"How can prices come down by 30-40% when margin is not more than 10% in mid-range and budget real estate?" he wondered.

The impact might be felt only in the very premium real estate segment but definitely not in the budget housing segment, Pansari pointed out.

He also said that The Real Estate (Regulation and Development) Act, 2016, which will come into force in the near future, will also help actual user segment boost its confidence in buying.

"I believe that positive impacts of interest rate and new buyer's safety law will culminate into investment buying for budget housing," Pansari said.

He also added that housing like SouthWinds by Primarc as a micro township project in the southern part of E M Bypass is expected to benefit from demonetisation.