The withdrawal or the demonitisation of Rs.500/- and Rs.1,000/- has serious implication to the illegally parked or black money in the real estate sector and it might take 6 months to one year to recover from the shock and its after effects.
As of now, there might be anywhere around 50,000 to 1,00,000 apartments ( ready-under construction-pre launch) which is lying unsold in Bangalore alone and those who have booked in the pre launch stage will take a GOOD BEATING.
The rental returns and the average appreciation coupled with Donald Trump`s Dramatic win and the apprehension that the IT Sector may also loose its sheen, has turned tables on the builders. The sudden demonitisation has hit the business circles very bad, especially, the small and retail sector.
The effects of this circus will be felt in the coming months.
The Income Tax department is also monitoring the entire operation with care.
The property prices will rise only in the internet, newspapers and from the mouth of the sellers, but in fact the price rise will not happen at all for quite some time.
The property prices might go down by 10% to 30% in the coming months, as the rent market is already down and many tenants are already shifting or buying cheaper apartments closer to their work place. The demonitisation will put brakes on the speeding real estate market.
Think and Plan the next move.
One thought on “DEMONITISATION AND ITS EFFECT ON REAL ESTATE OR PROPERTY PRICES”
Real estate business is logically the worst affected because this business was progressing fast only against highest use of black money, and have amassed huge unaccounted funds in bag fulls. There is a ray of hope that in a year or two this trade could revive at the fresh corrected market rates when even registration deed as also property taxes are eliminated all together, with the introduction of bank transactions tax. This could also see the removal of even income, sales, vat, excise, road and most of the taxes, the ultimate aim which Modi has embarked upon. The digitalisation of money transactions is one strong step in this direction. Huge unaccounted funds per rooms of bag fulls on 1,000 and 500 currency notes in party offices and leaders all around, having vanished and evaporated over night, the eletions are going to be vastly cheaper giving rise to entry of honest citizens knowing there are going to be no wind falls, and country getting honest and rich dividends. Next possible step is to target properties purchased with high unaccounted funds as also benami properties, plots, kothis, & business partnerships, shares, mutual funds, diamonds, gold, jewellery by bureaucrats, Real Estate dealers, Chartered Accountants, and of course large bribe prone babus and officersin police, PH, PWD, Excise, Income Tax, Vat Taxtions, Municipal Committees, Customs, RTI etc etc .This demonitisation is going to be wide scale manthan where mostof the unaccounted funds players willfeel the highest set back, many going to get free food and lodging in Jails all over India, sothe rstof the citizinery enjoy a stress free life..
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