At the time when demonetization was enforced in India, it was said that it will have a great impact on real estate sector. It was also predicted that the price of property will be lowered and it will take at one or two years for it to get back to what it was.
But it seems that this is not the scenario anymore. The real estate sector has recovered at fast pace. As per the recent data from top eight cities in India, it can be said that real estate sector has started flourishing again.
The reason for this come back is the reduction in home loan rates. Home loan rates are reduced by banks like SBI. SBI is offering home loan up to Rs. 30 lakhs with the interest rate of 8.35%. It is the lowest rate in last six years. For loan of the amount above Rs. 30 lakhs, the interest rate will be 8.5% and for loan above Rs. 75 lakhs the interest rate will be 8.6%.
Also, there is a subsidy up to Rs. 2.67 Lakhs given to borrowers under Pradhan Mantri Aawas Yojna scheme. SBI is also helping its clients to avail this subsidy.
Similarly other loan providers have also reduced their interest rates. LIC Housing Finance Limited now offers interest rate of 8.4% for loan up to Rs. 25 lakhs. Bajaj Finance is offering the rate of 8.5% up to May 2016. Also, HDFC has reduced its home loan rates to 8.5% for the new customers.
Such reduction in home loan rates and subsidy by government has helped real estate sector to beat the effects of demonetization.