How has Demonetization Impacted the Different Segments of Real Estate?
May 18, 2017 Real Estate News
Real estate market has different segments like land, resale, primary and all have been affected by demonetization in their own way.
Demonetization has slowed down the sale and purchase in the real estate market due to the cash crunch. Most of the payments were done in the mode of cash and with the unavailability of it; the market has been hit badly.
The resale market has hit a new low because of the unavailability of liquid cash. Those who have already made the sale before demonetization and done the partial sale purchase in cash, have nothing left to do but declare the amount and pay the taxes. The same is expected to remain for some more time in the land sale and resale.
The primary market is not expected to be affected severely as most of the purchases in the primary market are the developer themselves. Their prices are already least of what they can provide, but a slight negotiation on price can help in the decrease in price further. Almost all the developers use bank transactions like cheques, demand draft or cheques, the primary market is expected to suffer the least.
Demonetization is expected to cause a slight distress because buyers who had ready liquid cash before for buying the property cannot do the same for some time now.
With RERA, GST and Real Estate Investment Trusts (REIT) in sight, it is expected to bring more transparency and trust among the buyers and builders for the same.
Black money is the reason that eh prices of the properties increase. Since demonetization, the prices of properties have been reduced 20 percent - 40 percent of the original price. Also, the luxury segment has seen a massive price correction. It is expected that it will motivate the buyers to buy a property whether luxury or affordable. It will help in reviving the slow real estate market in long run.
Which segment will be affected by demonetization?
1. Primary market will not be affected much by demonetization, though it is expected that the sales will drop for a while but it will rise soon as more genuine buyers will show interest in buying the property.
2. Since the cash component involving the transaction of the property is higher in Tier II and Tier III cities, they are expected to be hit severely.
3. Land sales will be affected for some time due to the cash crunch.
Demonetization has slowed down the sale and purchase in the real estate market due to the cash crunch. Most of the payments were done in the mode of cash and with the unavailability of it; the market has been hit badly.
The resale market has hit a new low because of the unavailability of liquid cash. Those who have already made the sale before demonetization and done the partial sale purchase in cash, have nothing left to do but declare the amount and pay the taxes. The same is expected to remain for some more time in the land sale and resale.
The primary market is not expected to be affected severely as most of the purchases in the primary market are the developer themselves. Their prices are already least of what they can provide, but a slight negotiation on price can help in the decrease in price further. Almost all the developers use bank transactions like cheques, demand draft or cheques, the primary market is expected to suffer the least.
Demonetization is expected to cause a slight distress because buyers who had ready liquid cash before for buying the property cannot do the same for some time now.
With RERA, GST and Real Estate Investment Trusts (REIT) in sight, it is expected to bring more transparency and trust among the buyers and builders for the same.
Black money is the reason that eh prices of the properties increase. Since demonetization, the prices of properties have been reduced 20 percent - 40 percent of the original price. Also, the luxury segment has seen a massive price correction. It is expected that it will motivate the buyers to buy a property whether luxury or affordable. It will help in reviving the slow real estate market in long run.
Which segment will be affected by demonetization?
1. Primary market will not be affected much by demonetization, though it is expected that the sales will drop for a while but it will rise soon as more genuine buyers will show interest in buying the property.
2. Since the cash component involving the transaction of the property is higher in Tier II and Tier III cities, they are expected to be hit severely.
3. Land sales will be affected for some time due to the cash crunch.
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