Real Estate sees loss due to demonitisation
Even during Diwali, sales were less than 50 per cent than usual.
Mumbai: The Housing and Real Estate sector, one of the worst hit sectors after demonetisation has still not been able to get back to its feet. According to builders, even during Diwali, there was no spurt in sales as they were less than 50 per cent. Demonetisation will complete one year on November 8, but till now, the sector is unable to make progress.
The Asian Age enquired with the housing experts and other personalities from the sector to study the long pending impact of note ban on the sector. “Soon after demonetisation, the market was down for two months, and now it has picked up little pace but is not in a good condition. Prices which were slashed during that time have still not changed. The real estate market is stagnant. It may take another one year for the market to come back to normalcy,” said an official from Builders’ Association of India (BAI).
The primary residential market and projects undertaken by credible and reputed builders were not affected significantly by demonetisation. Transactions in these markets are broadly financed through legal channels of banks and housing finance institutions providing home loans to buyers. Only in projects where cash component was involved and those in the secondary market have been affected.
“There have been plus points of demonetisation as well, it has changed the shape of real estate market, as all transactions are through cheques. On the other side, the sale pattern has drastically changed, sales has gone down tremendously. Comparing with last Diwali, this year the sales were less than 50 per cent. New launches have vanished, only 10-20 per cent launched this year,” said Anand Gupta, member of BAI.
Meanwhile, a few also believe that GST and ReRa are also equally responsible for pulling down the market today. According to Surendra Hiranandani, CMD, House of Hiranandani, while the economy was trying to pull itself out from demonetisation, confusion over implementation of Real Estate Regulation Act (RERA) and the Goods and Services Tax (GST) caused further widespread disruption.
After note ban
- 60% decrease in new launch supply
- 32% decline in sales
- Number of unsold units has reduced by nearly 6%