The central government’s decision to demonetise Rs 500 and 1,000 currency notes has hinted at positive signals for the real estate fraternity, say market experts.
The Indian real estate sector has witnessed a series of government decisions and laws passed this year. While the quick implementation of RERA Act has increased the interest of genuine buyers and enforcement of new exit policy has brought happiness among the developers fraternity. The latest is the government’s decision to ban currency notes of Rs 500 and Rs 1,000 promise the much-needed transparency in the realty market.
Many experts have called this an excellent step towards bringing transparency in real estate transaction.
“The sudden move taken by Modi Government to demonetize the currency notes of Rs. 500 and 1000 is a welcome measure and will positively work towards the long term content of the Indian Economy as a whole. There will be teething troubles involved in the switch over to a transparent system based on our bank transactions, but the much-required transition will go a long way to help the economy. With more money coming into the banking system, the interest rates are likely to suffer in the long run, which will act as an impetus for investment and contribute to a further improvement to GDP. With reduced/no availability of black money, the property prices are likely to decline which will ultimately lead to better quality and healthy competition among developers, who will be in a position to offer better products to consumers at reasonable prices”, says Dhiraj Jain, Director, Mahagun Group.
Similarly, the money supply in the system will get better utilised in production and productivity and lead to the generation of employment, rather than being wasted in lavish weddings, election rallies and such activities, he adds further.
According to Vikas Pudir, CMD, SKB Group, “This is one of the best decision taken by government which will also go in the favor of real estate market. This action will continue to have a positive impact on the realty market and end users are going to benefit in the long run. The action will boost the sentiments of home buyers.”
It will bring stability in the real estate market: Harish Arora, MD, Saksham Services says, “Right now it’s difficult and too early to declare anything about the impact of currency recall decision by center government on real estate market. But definitely this decision will give a long term stability to the real estate market. The positive impact is that it will ends the fictitious demand created by finances and investors holding black money in real estate and because of that market will become end user friendly. Also the property prices are likely to see a correction in time ahead. One positive impact of this decision is that it’ll bring transparency in deals for some times, till big currency note not comes in circulation. So for common man or end users it’s a win – win situation as they can avail maximum loan amount at the time of buying house because no cash will be involved in deals. So hopefully this decision will put positive impact on Real estate market.”
“It is a positive move and will affect the real estate industry in a positive way in the coming time as home loan finance will increase and transparency will prevail in real estate transaction”, says Akshay Taneja, MD, TDI Infratech Ltd..
The Confederation of Real Estate Developers’ Associations of India (CREDAI), NCR wing has said that that buying, selling of property, builder-buyer transactions have not affected by the ban as they are all made either through fund transfer or via cheques.
“The market would experience gap in demand and supply scenario. But the demand for the affordable housing sector will not be impacted. It is only because cash component in affordable sector is typically minimal as buyers need home loans for up to 90 per cent of the purchased property price”, says Sunil Pandey of Real Homez.