Demonetization Expected To Bring Cheer in Real Estate
May 15, 2017 Real Estate News
Prime minister Narendra Modi’s sudden and surprising move to demonetize 500 and 1000 rupee notes received mix reviews from different quarters of the society. Although the demonetization did bring troubles of standing in endless queues in banks to get new currency for a majority of the country’s population, it is speculated to achieve a landmark status in future. With the sudden banning of higher denomination notes, several sectors in the country have suffered disruptions, generally which are primarily dependent on cash transactions.
Repercussions of demonetization can be easily observed in the Indian real estate sector, which had already got the dubious distinction of being a ground to ensure a safe passage of undisclosed incomes. With the old 500 and 1000 rupee notes now banned, several real estate deals have failed to see the light of the day. Cash being one of the major components in most of the property transactions, demonetization has certainly brought such deals to a complete halt. With the old currency now out of the picture, demonetization will only help clean up the secondary real estate market.
The primary market is speculated to benefit the most due to the said move. For years now real estate has been witnessing a slowdown. High property prices coupled with even high lending rates have done their best to keep the potential home buyers away. Moreover, the involvement of black money in property transactions has only added to the losses of the exchequer and further pushing the country’s economy into turmoil. However, experts believe times are about to change thanks to demonetization.
Since demonetization was announced, several property deals are either halted or cancelled permanently. As a result, developers are stuck with piled up inventory and will help bring down property prices by a few notches. Market experts believe that demonetization will prove to be a boon for real estate in the longer run and if it is further accompanied with deregulation, will only help the ailing sector to produce good results.
Economic experts believe the country’s black money to be around 30 percent of its GDP. Demonetization will help bring a substantial amount of these funds into the system. Moreover, with banks expecting a steady rise in deposits, it will help bring down lending rates thereby further motivating people into purchasing properties.
Since the last one year, the Central government has introduced several schemes and bills to lift the realty sector in the country. With the introduction of Real Estate Regulation and Development Act 2016 (RERA), the government aims to protect home buyers by ensuring transparency and accountability in the system. Moreover, with the implementation of GST starting next fiscal, registering of properties is expected to get easier.
Repercussions of demonetization can be easily observed in the Indian real estate sector, which had already got the dubious distinction of being a ground to ensure a safe passage of undisclosed incomes. With the old 500 and 1000 rupee notes now banned, several real estate deals have failed to see the light of the day. Cash being one of the major components in most of the property transactions, demonetization has certainly brought such deals to a complete halt. With the old currency now out of the picture, demonetization will only help clean up the secondary real estate market.
The primary market is speculated to benefit the most due to the said move. For years now real estate has been witnessing a slowdown. High property prices coupled with even high lending rates have done their best to keep the potential home buyers away. Moreover, the involvement of black money in property transactions has only added to the losses of the exchequer and further pushing the country’s economy into turmoil. However, experts believe times are about to change thanks to demonetization.
Since demonetization was announced, several property deals are either halted or cancelled permanently. As a result, developers are stuck with piled up inventory and will help bring down property prices by a few notches. Market experts believe that demonetization will prove to be a boon for real estate in the longer run and if it is further accompanied with deregulation, will only help the ailing sector to produce good results.
Economic experts believe the country’s black money to be around 30 percent of its GDP. Demonetization will help bring a substantial amount of these funds into the system. Moreover, with banks expecting a steady rise in deposits, it will help bring down lending rates thereby further motivating people into purchasing properties.
Since the last one year, the Central government has introduced several schemes and bills to lift the realty sector in the country. With the introduction of Real Estate Regulation and Development Act 2016 (RERA), the government aims to protect home buyers by ensuring transparency and accountability in the system. Moreover, with the implementation of GST starting next fiscal, registering of properties is expected to get easier.
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