The entire nation was tremendously shaken up after the money demonetization of the 500 and 1000 rupee notes by the Modi government. What many people did not know is that this is not the first time that demonetization has taken place in the country. In 1946 and 1978 demonetization was done by the then ruling party but the impact of the decision was not as severe as in 2016 as the Indian economy is much stronger compared to then.
The impact of this decision would be ongoing however the effect on the real estate sector is visible. Since Prime Minister Modi’s surprise announcement, the ripples have been spreading through the already disturbed sector, which was experiencing excruciatingly slow growth in recent times. Poor sales leading to almost flat prices, heavy liquidity challenges, and high unsold inventory have all colluded to keep real estate sector away from fulfilling its potential – and provide necessary residential stability to average citizens.
The impact of money demonetization on real estate is much higher as compared to any other sector as in the involvement of black money and cash transaction in this sector is much more. Nonetheless, all such rates have been in the optional deals where money segments have customarily been a variable must. The resale properties section will take a major hit. Be that as it may, fleeting agony is inescapable when we search for any possible long haul cure. There has been a strident request to get straightforwardness in the area to ensure it turns out to be more sorted. The extravagance and top of the line sections of private land will likewise observe a noteworthy effect from this work out, since it is another territory which has seen a considerable measure of instalments done in real money. The lawful saving money/financing channels have represented just a little piece of all exchanges in this space. Demonetization will bring property costs plunging by as much as 25-30% as merchants battle to offload properties to create liquidity. This implies extravagant home purchasers will all of a sudden have a much more extensive data transfer capacity of choices to look over. With dark cash all of a sudden being wiped out of the market, a great deal of financial specialists who have been putting resources into tasks with unaccounted-for cash – and raising costs to book benefits – will be disposed of from the framework, in this way helping a genuinely necessary adjustment.
In the past year, the decisions that have taken place have the potential to be long lasting decisions in the real estate sector.
The passing of RERA (Real Estate Regulation and Development Act 2016), the Benami Transactions Act and now the demonetization will ensure that going forward will become more transparent and will definitely lose its historic taint. These regulations would also prevent investors from getting cheated and buy properties of their choice at affordable prices, the place where they want to and the timely possession will also be assured.
The demonetization practice was an exceptionally essential stride which will undoubtedly carry with it an enormous shake-up wherever dark cash has assumed a noteworthy part. Over the long haul, the Indian land part will rise more grounded, more beneficial and prepared to do long stretches of managed development.