The way forward for Real Estate sector
After de-monetization in 2016 most of the cash came back into the banking channels and after the implementation of GST the spending in cash by the builder became very difficult. The resultant is the liquidity of the builders got hampered very badly. On top of it there are no end users or very few end users for the unsold flats and that is the reason why the real estate sector is in doldrums for past few years. The builders have stock but it won't get sold because there are no end users or very few end users. Secondly, the real owners of these flats (the investors of black money) would not reduce the prices because if the flats get sold they don't get much cash and they have to accept the money through official channels, due to which they would get exposed.
As said by the Chairman Emeritus of HDFC Shri Deepak Parekh, the builders should now book the losses and sell these unsold flats at substantially lower prices, basically to improve their own liquidity. That is the only way one could come out of red zone and start afresh.
The present market is of the affordable houses and anyone venturing into affordable housing having price Range of Rs. 12-25 Lakhs will be successful. more