The real estate sector is the second largest generator of employment in India. It heavily contributes in India’s GDP; the housing sector alone contributes around 5-6% and by 2020 the whole of Indian real estate market was expected to touch US$ 180 billion but the denomination of Indian Rupee has changed the scenario.
There is a buzz all over the place about – “The prices of land is going to fall”, “It would be tough to get a housing loan”, “Getting a property in metro might become a dream in near future…”. These are some vague statements that UniMax Solutions would try to answer and bring more clarity on effects of demonitisation on Indian real estate market.
1. Undoubtedly, this decision will help institutionalise the real estate sector by bringing more transparency in the Indian real estate industry. This step would give the Indian real estate sector more credibility making it more attractive to the foreign as well as domestic investors.
2. There will be more transparency in accounting, banks will mark increased inflow of cash, and the ongoing demand for residential investments will influence the home loan rates making them friendlier to buyers. It might be a hassle to procure a home loan currently, but once the exchange of currency is smoother, there is an expected systemisation, ease to get loans.
3. Be it a mid range house or a high end property, there are no problems faced by transactions that happen systematically. Hence, bringing in more visibility in the real estate sector and more importantly shutting the doors to illegal flow of cash. This makes 2017 a very lucrative time for people with modest savings to invest in real estate.
Alay Shah a real estate broker in Mumbai says, “Real estate crash will happen slowly because people will yield to the pressure slowly and start selling at lower prices because suddenly the pool of potential buyers have gone down. I predict that real estate prices would dip to lowest by end of 2017 and then start moving up again as inflation catches up, thus this is the best time to buy the real estate”
4. These factors indicate of real estate becoming a potential future of investments and money-parking chests that can reap increasing returns for future generations.