Pramukh Group

Impact Of Demonetisation On Real Estate


A step for betterment, a step towards revolutionizing India and making an exit for the Black Money. The move is for sure to create a history in the books of India. Prime Minister Narendra Modi proved that he is the game by making an announcement which was unexpected that shook entire India.

Different acts and measures were incorporated at different points of time asking to declare the undisclosed money earned by all the means and thus the move was a calculated one, after several warnings.

The PM has been very precise in his actions and determined to curb black money and eliminate corruption. The move indeed was much needed.

To gauge the impact as a whole is a little early, however, the impact on the real estate sector was immediately visible. The factors contributing to the same are a tremendous drop in sales, liquidity challenges due to lack of cash and high unsold inventory. This will, however, meet the strident latent demand of transparency which was in the market for long.

The luxury and high-end markets are already facing the crunch because the major part of the payment was done in cash. Now the luxury home buyers have a wider market to choose from. Only the honest players will survive the race. In the long run, the Indian real estate sector will emerge as a tougher and sustainable sector. All the investments would now be legal and corporatised.

The other implications would be:

  1. Banks will now offer lower lending rates
  2. Allowing a larger group to avail the loan benefits
  3. Enable wide group of buyers to buy their dream space
  4. The EMIs will be lower and easy on the pockets of a common man
  5. Government may look at providing better incentives, boosting the infrastructure

The move has some challenges in its initial stage, however, it will have a positive impact on Real Estate and bring in the stability soon. Black money has been given a farewell and is on the way to exit whereas a new dawn awaits a better India.

Ivet Berges
Prashant Bhatu

Director - Pramukh Group

Comments:

  • Dinesh

    Truly addressed the scenario, but What about the prices in real estate. What impact the property price would have in Surat and across country?

    • Prashant

      I strongly believe that the prices will definitely remain unchanged and unaffected in the projects of the known and reputed developers those were doing business in organised way, for them volume was the game and were doing business at very reasonable profit margins. Also I do not deny that there won’t be any opportunity for buyer to find property in lower rates but it might have its own risk associated e.g. (project quality, project delay, project delivery)

  • Raajesh Pandey

    Truly said....your sector will take little time to move forward & if during this phase if any organisation has set up his position as organized company/sector, possibility of growth rate will be hire.

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