Demonetisation, GST have hit realty sector in Hubballi-Dharwad: Survey

HUBBALLI: While the Centre is terming its demonetisation move and the Goods and Services Tax (GST) as successful reforms, realtors in Hubballi-Dharwad are attributing the slowdown of the sector to these initiatives.
A random survey carried out by CREDAI has revealed there are more than 60% unsold residential inventories in the twin cities.
About 94% of builders and developers feel demonetization has affected the sector.
CREDAI's Hubballi-Dharwad chapter president Pradeep Raikar told TOI, “The survey was undertaken to know the customers’ buying behaviour, and investment patterns in buying behaviour, to study the impact of demonetisation and its impact on real estate, to know the perception of builders and buyers, and their current status in the market, and to study the impact of the new RERA rules.”
The survey revealed that the demand for real estate in the twin cities is no longer confined to upscale localities like Vidya Nagar, Badami Nagar and Keshwapur, but to the outskirts too.
While the price per square foot is between Rs 400 to Rs 800 on the outskirts of the city, it is between Rs 1,000 to Rs 2,000 within the city limits.
Land prices in Noolvi and Gabbur has increased from Rs 400 to Rs 800 per square feet, as the price of agriculture land has gone up to Rs 80 lakh per acre.
Developers are now scouting for land, and are concentrating on places like Navanagar and Tarihal, as they are nearer to the twin cities.
The survey has found that 81.8% of the people here are intending to purchase houses or flats, and the remaining 18.2% are not.
A total of 78.2 % of respondents have expressed their willingness to buy a house under the Pradhan Mantri Awas Yojana, while the remaining are not.

A total 34.7% of the respondents felt that GST impacted their buying behaviour, and remaining 65.3% felt it has not.
About 51.8% of the respondents felt demonetisation has affected their investment plans, and the remaining 48.2% felt that it has not.
However, about 94% of developers and builders felt the note ban has affected the market. On RERA, 54 % of realtors think it has affected the market and 46% felt otherwise.
“Sales have dropped since demonetisation. We are in the same position that we were last year. We are not seeing any sales due to GST. If the buyer wants to buy a house, he has to shell out 18% of GST plus 7% of GST for property transfer. The government is taking back 25% of the money. Individuals are not being benefited by the subsidy. Since property value is not increasing, the people are feeling the investment in the realty sector at this moment is not advisable. End users will benefit only if the GST is reduced to 9 %. Housing for all by 2022 will not be possible with the current rate of GST,” Raikar added.