The upheaval in the Money Markets during the September–November has largely settled with a fair amount of confidence returning back as all of the commercial papers (CPs) that were to mature have been honoured. There is more willingness to lend money today as there have been a slew of timely actions by the authorities, and with the Reserve Bank of India's (RBI) comforting statement on 'lender of last resort' I think people need to now get back to business.
Coincidentally, crude oil prices during the same September–November period has been extremely volatile. It is rare to see crude prices move over 5% in a single day, which has happened twice in November. Fortunately for India, crude falling so sharply from $80-plus levels to around $60 in a span of a couple of weeks has reduced the pressure on the fiscal deficit front. Also, the recent dovish statements from the Fed chairman on interest rates (in the US) and the RBI augurs well for interest rates in India to remain benign for the near term.
Given the housing shortage and the ever growing demand we maintain that housing in India is a structural story not for a year or two but for decades. Low penetration levels of housing, relatively lower interest rates, stable property prices, young population, rapid urbanisation and governments relentless focus on housing by providing fiscal benefits and special schemes with huge concessions for housing under the PMAY will drive growth. With loans also being offered for a long duration, it is more convenient for the customer.
One critical impediment in the last few years was the loss of confidence on the part of the customer to buy a property due to delays in delivery and the opaqueness in the sector. This has been largely addressed with implementation of Real Estate Regulatory Authority.
Demonetization has helped the housing sector reduce the black money menace. Also, the so-called unproductive money moving into the formal economy has improved prospects for buyers to buy homes as they can finance the property by taking a larger loan, subject to their repayment capacity.
Investors have been out of the real estate market as it was not rewarding to invest in real estate with the relatively illiquid nature of this asset, a huge upfront transaction cost and very little capital appreciation.
Hence, I would say it is perhaps the best time for an end-user to buy a house.
The writer is managing director, HDFC Ltd
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 "Renu Sud Karnad")
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