Effects Of Demonetization On The Indian Property Market

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PM Narendra Modi, on the eve of November 8, surprised (or shocked) the entire country with his policy of holding back legal tender on Rs 500 and Rs 1000 notes. From the youth gathered in coffee shops to the leading business professional, this move is the hottest topic of debate among everyone. With India’s business tremendously shaken by this midnight ban, what impact would it have on the real estate sector of the country?


As the market opened for business a day past this move, many real estate indices saw a steep fall. The Nifty Realty Index saw a sudden downfall of 12%. While the S&P BSE Mid Cap index was seen falling by 11.2 % as HDIL, Indiabulls, Prestige Estate and Unitech witnessed a great loss.


Modi addressed in his speech that this move was to curb the black money. And with realty sector playing a big part in it, it would be interesting to read how this sector would be impacted by this midnight ban.


How Would the Real Estate Sector Be Affected?
Realty sector has the largest share of India’s black money. This move, to eradicate black money, would cause an upheaval in the real estate market. The primary sector or fresh inventory sale would be least affect by this move because most of its transactions are taken over by the finances provided by financial institutions and banks. The resale market is where the real hit would be. However, people would now look out for better real estate investment where there is more transparency in payment structure.


The sale of higher-end premium property and the resale inventory would be the ones at that would be greatly impacted by this master stroke played by Modi. "The secondary or resale market will, however, certainly be impacted, given the fact that this segment does see the involvement of cash component,'' read the JLL India report. Luxury property where more transactions are done by cash would also see a drop of 25%-30%. These areas will be adversely affected as people investing here do not make use of banking channels for the payment.


What Will Be The Long-term Impact?
The liquidity squeeze is only temporary and with the changing times, it would only lead to clear and transparent transactions. Price of property will be seeing a downfall in the near future because of this demonetization.


According to many real estate experts, this move will not see much impact on the primary realty market. However, the secondary market would be highly affected by this sudden move. Most reputed developers in the primary sector undertake cashless transactions and thus would be least affected. The CBRE Chairman, Anshuman finds that this ‘bold move’ would have a very positive impact in the long run. According to him, this move would increase the confidence of investors in real estate market as there could be more transparency in every transaction. The GST and Real estate Regulatory Bill would add to this transparency.


With Rs 500 and Rs 1000 notes declared invalid, the realty market would freeze for some time and because of this the rate of unsold inventory would increase; thus, leading to a fall in the property prices over time. So, it’s better not to panic and just wait for the prices to fall and carry out more transparent transactions in future.

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27 Comments

  • Admin

    Prospek teknik elektro

    23 November, 2017 at 1:04 am

    I like it when people come together and share views. Great website, stick with it! materi mata kuliah statistik

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  • Admin

    Home inspection

    20 June, 2017 at 1:56 pm

    Cool...! looks great..!

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  • Admin

    Nilesh Patel

    27 February, 2017 at 1:19 pm

    Nice information shared.

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  • Admin

    sumit

    23 December, 2016 at 4:48 pm

    Great post, thanks for sharing. The real estate sector will definitely be affected by the demonetization exercise, as it has traditionally seen a very high involvement of black money and cash transactions.

    Cancel Reply

  • Admin

    Rishika Ahluwalia

    21 December, 2016 at 4:53 pm

    Demonetization was indeed a good move made by the government. It has effected various sectors in India but just for short run, once everything falls on a right track, it will produce positive results.

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  • Admin

    Kishor

    17 December, 2016 at 10:19 am

    This is my first time go (Visitted Title " Effects Of Demonetization On The Indian Property Market") to see at here and i am truly happy to read all at single place.

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  • Admin

    MOHAMMAD ARSHAD KHAN

    29 November, 2016 at 5:54 am

    Nothing will effect it is just topy drama

    Cancel Reply

  • Admin

    Rutika

    29 November, 2016 at 4:24 pm

    Is it possible to reduce bank home loan interest rate?

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  • Admin

    Ashish Kumar

    28 November, 2016 at 11:13 am

    The effect of demonetization will be very positive in future. At present people are facing some difficulty for withdrawing money and currency exchange, but without pain their is nothing to gain. Today people giving their contribution to build up a powerful country.

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  • Admin

    Rajesh Jain

    18 November, 2016 at 12:38 am

    For most up-to-date news you have to go to see web and on web I found this site as a finest website for latest updates. and also this (Effects Of Demonetization On The Indian Property Market) is latest news...

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  • Admin

    Atul bharti

    18 November, 2016 at 10:47 am

    "What a fantastic move against black money to ban Rs 500 and Rs 1000 notes! This will be a game changer. I welcome it wholeheartedly."

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  • Admin

    Sandeep

    18 November, 2016 at 10:50 am

    It' right ! it really going to effect real estate market but also its a real fact the in future every tenant and common man is going be able to dream of his own house..

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  • Admin

    Shweta Gautam

    18 November, 2016 at 10:53 am

    Thanks for your information on this cause!

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  • Admin

    Abhi Sharma

    18 November, 2016 at 11:02 am

    Now may be real estate market will be down..just because of "Demonetization".,.,

    Cancel Reply

  • Admin

    Abhi Sharma

    18 November, 2016 at 11:03 am

    Yes, real estate market will be down..just because of "Demonetization".,.,But our dream come true because "sabka ghar and sabka vikas" will happen in future. Thanks Respected PM

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  • Admin

    Hitesh Jain

    18 November, 2016 at 11:15 am

    Now may be real estate market will be down..just because of "Demonetization". You are absolutely correct, you mention right information. Thanks for the writing on this topic.

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  • Admin

    Parveen Riyat

    18 November, 2016 at 11:27 am

    Thanks for sharing the information. Demonitisation will impact over Indian property market and experts believe that move by the government will help improve transparency in the Indian realestate market.

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  • Admin

    ASHISH KUMAR PATHAK

    18 November, 2016 at 2:58 pm

    The ripple effects of demonetisation cannot be understated. There are major industries in India that thrive on a parallel economy funded by black money. With the rupee remaining relatively stable, the debt market has reacted positively to both Trump’s victory and the demonetisation move. Result will most probably shown in coming 50 days. !!!

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  • Admin

    B N Mishra

    17 November, 2016 at 10:24 am

    Residential real estate: The primary sales segment is largely influenced by home finance players, and these deals tend to be facilitated in a transparent manner. Obviously demonetization will be create great impact on real estate industry.

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  • Admin

    Mukesh Thakur

    17 November, 2016 at 6:08 am

    You ought to take part in a contest for one of the greatest blogs on the net. I am going to highly recommend this blog! Thanks for your information about "Effects Of Demonetization On The Indian Property Market".

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  • Admin

    Ajay Yadav

    17 November, 2016 at 6:08 am

    Good Information, We all know it will effect property market. Because Investor are continuously investing black money in property sector.

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  • Admin

    Ashish Kumar

    17 November, 2016 at 10:18 am

    Now Property Will Available for "AAM AADMI" because Black Money will not use more in future..

    Cancel Reply

  • Admin

    Rajesh

    17 November, 2016 at 10:25 am

    as per me this is a right decision and it will work after few months and common man can buy own house, Because few month later real estate sector price will be decreased.

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  • Admin

    Suraj Kumar Gupta

    17 November, 2016 at 10:31 am

    Every middle family faced very trouble to take flat but after this decision, everyone have hope property rate will be down.

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  • Admin

    Dipendra Kumar

    17 November, 2016 at 5:19 pm

    Demonetization of currency will affect the India real estate market on a wide scale directly or indirectly. Because dealing in cash is not going to be of much value as far as investment is concerned. I agree with the author in all the aspects. Thanks for the thoughts...!!!

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  • Admin

    Bobby Rajoria

    17 November, 2016 at 5:27 pm

    The scrapping of Rs 500 and Rs 1,000 currency notes will impact the Indian real estate market as it will push the black money holders on their back foots. Also, limited cash withdrawals and payments through cheques (online transaction) will help create a better situation in India when it comes to corruption. Thanks for the incredible post!

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  • Admin

    Anand Kumar

    16 November, 2016 at 5:04 pm

    As we know 86% of currency worth has been occupied by 500 Rs & 1000 so it will effect our realty market.

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