Demonetization Effects on Real Estate Industry in Maharashtra
What will be the Long-term or immediate impacts of Prime Minister’s sudden demonetization decision on real estate? Will the prices of properties fall or increase after the ban on Rs. 500 and Rs. 1000 notes from the mainstream?
Such puzzling questions are raising the curiosity of many Indians as well as global spectators who take interest in real estate market. In Pune or whole Maharashtra, people have mixed opinion about the effects of demonetization.
While the demonetization move tries to throw the dark cash out of our economy but it has also affected the real estate sector which visualizes heavy cash flow during property exchange.
Here are the quick glimpses what effects demonetization has/will have on the Real Estate Industry in Maharashtra.
The Bright Side
To start with – primary business is not going to witness large impacts immediately.
In low-end projects, prices are not going to vary.
Salaried class is fueled by home loans and hence no decrease in demand.
Land evaluation in the unorganized sector will see a major correction of around 20-30%.
Global real estate investors will be more interested in investing in a transparent and fast-developing economy.
Transactions in cities like Pune happen mostly without cash dealing, unlike Maharashtra. With more salaried professionals and better money flow system, the builders can expect a significant rise in demand.
The Dark Side
Small builders may need to sell on lower price temporarily.
Business of reselling properties may face some correction.
Investors will take less interest in real estate investment due to Benami Property strike declaration.
High-end projects may face correction to a small extent.
The Bottom Line
Demonetization has upsides as well as downsides for the real estate industry, whether we talk about Maharashtra or any other state of India. The reason is high involvement of cash and back money in buying the property. With ruling out dark cash and arrival of a cashless system, there are chances of reduced sells to big and corrupt players.
On the contrary, there is a secondary market arriving to fill the losses for real estate businessmen. This market comprises of foreign investors and strengthening Indian economy class as the changed system will create more employments and better salaries. Also, there are chances of reduced home loans, as indicated by the Chairperson of State Bank of India.
What do you think? Will demonetization affect Maharashtra’s Real Business positively or negatively?