The government’s
recent decision to demonetize the 5, 00 and 1,000 rupees currency notes have
been a surprise element to many of us. However, the real estate in Noida seems
to be the most affected. The property market of the NCR is primarily works as a
secondary market where the property owners are reselling the residential which
are acquired from the primary holders. It is an established fact that majority
of the transactions are done in cash and they are not recorded with the tax
authorities. This ill practice may soon come to an end with this recent
announcement of Demonetization.
The
investors and the stockholders are in the deep panic and the rates of property in Noida are expected t o
fall by 25% to 30% in the coming 6-7 months. This is further established by the
fact that recently a property which was listed at Rs. 3.25 crores in the NCRregion
was being offered at a price of Rs.2.25 crores. The situation in the NCR is
also same as the properties here also face the heat of the demonetization
policy. The most severely hit segment is the high end property section.
Let us
understand the effect of the demonetization on the real estate market-
· Cash Element- The cash component in the real estate industry was never treated
in a different manner. Cash is considered as the transaction enabler who benefited
both the buyer and the seller. But as cash transaction is considered as an unsaid
norm in the Indian real estate market,
it is really hard to say how long people can stay away from it. Here it is
vital to understand that cash is considered as reliable as cheque, so sooner or
later people will adjust themselves with the changing scenario.
· Immediate impact on the real estate- The immediate impact of the
demonetization on the real estate business may be relentless. The areas hit by
this move are the investment, jobs and business in general. However, it would
be wise if most the corporate focus more on getting the operations on track and
be vigilant of the reforms. The people who will be adopting fast in this
scenario would be benefitted more.
All the upcoming projects in Noida with
higher ticket value are likely to be the, most affected one as cash is
considered as the major driver in all the transactions in this region.
