Demonetization can Change Your Decision of Buying A Property
May 17, 2017 Home Trading Steps
The real estate market has seen depreciation in sales in past few years. And with government’s new step in curbing black money through demonetization, it is expected that the real estate market will face some more crunch in sales.
The involvement of cash component in real estate market isn’t something that government is unaware of. Buyers try to pay a part of the amount in liquid cash which is unaccounted, to save on taxes and duties. However, not all the segments of real estate market if expected to be impacted severely by demonetization. It is also expected that the real estate market will revive in coming months with a price drop in the prices of properties.
Residential properties can be divided into two categories – luxury segment and affordable segment. The luxury segment is generally bought by the upper class and most of the transaction happens in liquid cash which remains undeclared. This segment might hit a new low and the prices are expected to drop in coming months. The affordable segment is purchased by the salaried customers who pay their taxes and the money is accounted for the same. Most of the transactions happen through banks with cheques, demand drafts etc.
The established and renowned builders are trying to keep their hands clean by involving only documented transaction with the sales.
Apart from demonetization government step in bringing RERA into force is going to help buyers and builders both. For a long time, buyers had to pay the brunt of delayed constructions and possessions of property causing a huge dent in their financial state. It is expected that RERA will keep a check on builders and will make sure that all the promises made by them at the time of booking are kept and provided. RERA is expected to make the property deals in the real estate market more transparent.
The luxury market and the resale market are expected to see a price correction because of demonetization. According to few reports, the price of luxury properties has already gone down 30 percent in Delhi and Mumbai.
The main question arises for the buyer is whether to wait or to buy the property now. Most of the builders are still holding onto the old prices, buyers can wait for a few more months for the prices to go down. For the serious buyers, this is a very time to invest in the property of your dreams.
Banks have reduced their interest rates by 25 basis points and they may reduce another 25 basis points. But reduction beyond it is unrealistic. Hence, buyers should focus on the prices of the real estate properties rather than the interest rates and take a step in buying the property fulfilling their needs and requirements.
The involvement of cash component in real estate market isn’t something that government is unaware of. Buyers try to pay a part of the amount in liquid cash which is unaccounted, to save on taxes and duties. However, not all the segments of real estate market if expected to be impacted severely by demonetization. It is also expected that the real estate market will revive in coming months with a price drop in the prices of properties.
Residential properties can be divided into two categories – luxury segment and affordable segment. The luxury segment is generally bought by the upper class and most of the transaction happens in liquid cash which remains undeclared. This segment might hit a new low and the prices are expected to drop in coming months. The affordable segment is purchased by the salaried customers who pay their taxes and the money is accounted for the same. Most of the transactions happen through banks with cheques, demand drafts etc.
The established and renowned builders are trying to keep their hands clean by involving only documented transaction with the sales.
Apart from demonetization government step in bringing RERA into force is going to help buyers and builders both. For a long time, buyers had to pay the brunt of delayed constructions and possessions of property causing a huge dent in their financial state. It is expected that RERA will keep a check on builders and will make sure that all the promises made by them at the time of booking are kept and provided. RERA is expected to make the property deals in the real estate market more transparent.
The luxury market and the resale market are expected to see a price correction because of demonetization. According to few reports, the price of luxury properties has already gone down 30 percent in Delhi and Mumbai.
The main question arises for the buyer is whether to wait or to buy the property now. Most of the builders are still holding onto the old prices, buyers can wait for a few more months for the prices to go down. For the serious buyers, this is a very time to invest in the property of your dreams.
Banks have reduced their interest rates by 25 basis points and they may reduce another 25 basis points. But reduction beyond it is unrealistic. Hence, buyers should focus on the prices of the real estate properties rather than the interest rates and take a step in buying the property fulfilling their needs and requirements.
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