Demonetisation: Don’t see it as ‘gloom and doom’ for housing

National Housing Bank (NHB) on Monday said that the government move to pull out certain high-value notes from circulation should not be seen as a “gloom and doom” scenario for the housing sector.

On the contrary, the demonetisation of ₹500 and ₹1,000 notes will only end up bringing down the prices in both “affordable housing” as well as in higher-priced segments (between ₹75 lakh and ₹1 crore per unit).

“I don’t see this (demonetisation) as a gloom and doom scenario for housing. Rather, I only see green shoots given that RERA (real estate regulator) will come up and the Benami Act already in place,” Sriram Kalyanaraman, Managing Director & CEO, National Housing Bank, told

“We see affordable housing prices come down by 15-20 per cent. This is already happening at the ground level. In the next 12 months, transparency and accountability will only go up with RERA coming. This will be good for industry,” Kalyanaraman said.

Even for the premium segment (homes above ₹75 lakh), there is a possibility of prices falling up to 25 per cent in the coming months due to the demonetisation effect, he added.

The NHB Chief said that stamp duty should be uniform across States and there may be a case to prune them. Kalyanaraman also saw merit in eventually bringing stamp duty under the proposed Goods and Services Tax (GST) regime. “Eventually, if stamp duty were to get subsumed under GST, it would only be good for the real estate industry,” he said.

NHB — which is the housing finance regulator — had recently commissioned Indian Institute of Management (IIM) Bangalore to undertake a ‘cause and effect’ study on stamp duties on property transactions across various States.

The aim of the study was to help build a case for States to lower the stamp duty on affordable housing. According to NHB estimates, the average stamp duty (including registration fees) for housing under the ‘affordable housing’ category ranged between 6 and 10 per cent, which is deemed to be on the higher side.

For the credit-linked subsidy scheme, NHB had developed an interim software solution for lodging of claims by primary lending institutions (PLIs). It is an online portal for PLIs to submit the subsidy claims.

Kalyanaraman said that NHB had, till November 30 this year, made total subsidy disbursement of ₹269 crore (loan disbursements amounting to ₹1,380.47 crore) to 74 primary lending institutions benefitting 15,054 households.