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Indian government’s ban on Rs 500 and Rs 1,000 currency notes is expected to hit the real estate sector quite badly. Real estate is one of the champion sectors when it comes to black money and it is likely to move towards improved transparency. 
 The move made by the <keyword id="6354814" type="UNKNOWN" weightage="20" keywordseo="prime-minister-Narendra-Modi">Prime Minister Narendra Modi</keyword> is expected to pull down property prices as the investors will not be able to deploy their cash in real estate and thereby forcing builders to sell at lower prices. <keyword id="1542754" type="COMPANY" weightage="20" keywordseo="Delhi-National-Capital">Delhi-National Capital</keyword> region is expected to take a blow really hard as their market is well known for highest involvement of cash component. 
 "Property markets will see around 30% correction in prices. Even builders who claim that they accept only cheques will also be forced to reduce prices given the market conditions around them. Apart from big property markets, tier II and III cities will be worst affected. Land prices will also move downward as these deals used to see at least 30% cash component,” <keyword id="676559" type="PERSON" weightage="20" keywordseo="Yashwant-Dalal">Yashwant Dalal</keyword>, president of the <keyword id="999922" type="ORGANIZATION" weightage="20" keywordseo="Estate-Agents-Association-of-India">Estate Agents Association of India</keyword>, told ET. 
 
The practice of investing unaccounted wealth is widely prevalent in real estate and the government's latest decision is expected to make things difficult for developers. There can be a rise in projects getting stuck as developers may slow down on construction given the liquidity stress for them. 
 "There is bound to be a downward pressure on prices of everything including real estate. This can be a good opportunity for end users to buy their dream homes. Sale of plotted developments will be worst hit. The move will lead to making the sector more transparent,” <keyword id="76339" type="PERSON" weightage="20" keywordseo="Rajeev-Talwar">Rajeev Talwar</keyword>, CEO, DLF and chairman of realtors' body NAREDCO, told ET. 
 
Though, there is widespread panic across the sectors, some of them are happy that the filth in the sector will be cleansed. 
 "This is the most positive and amazing decision that would lead to cleaning up of the system, it will help in improving the country's image and attract more foreign investments. Unfair advantage that certain developers dealing in cash enjoyed hitherto has now disappeared, it's a level playing field for us and we will do much better,” <keyword id="228295" type="PERSON" weightage="20" keywordseo="Vikas-Oberoi">Vikas Oberoi</keyword>, CMD, Oberoi Realty, told ET. 
 
Given the existing inventory across the prime property markets, the impact will be huge in several markets where payment of cash is mandatory and the major form of profit taking for developers as well as investors. These markets will see a major crash making an already difficult situation even more challenging.

Ban on Rs 500 and Rs 1,000 notes is going to jolt real estate. Here’s how

<keyword id="6371902" type="UNKNOWN" weightage="20" keywordseo="home-buyers">Home buyers</keyword> in Delhi, Mumbai, Bengaluru and Chennai are elated over plummeting <keyword id="35507" type="UNKNOWN" weightage="40" keywordseo="property-prices">property prices</keyword>, a trend which has also become a cause of concern for investors. 
 The slowdown of property price appreciation in these top cities has forced the investors to opt out of <keyword id="6354553" type="COMPANY" weightage="40" keywordseo="real-estate">real estate</keyword> market in India. 
 
Property investors are pained over difficult exit and incurred losses. 
 
Presently, in Delhi-NCR property prices have seen minute appreciation around 2 per cent in the last quarter of 2015 against 7 per cent in 2014. 
 
Likewise, in Mumbai also the residential property prices saw an appreciation of 3.3 per cent only. 
 
"A sign of any residential market's increasing maturity is evidenced by gentler price appreciation - a process which has been very much in evidence in the country's financial capital. Fourth quarter price performance in Delhi-NCR, Bengaluru and Chennai is also representation of what happened through the year," said Ramesh Nair, chief operating officer, business and international director at JLL India. 
 
Meanwhile, JLL predicts that the Mumbai residential property prices in 2016 will touch 6%. 
 
The JLL study showed that unlike the pre-global financial crisis times, the market has seen a rather subdued growth in prices over the last couple of years. 
 
"Current market does not offer any incentive to investors, even our usual set of investors are not showing any interest in picking up properties. If annual appreciation is less than 5% and lease rental yield is around 1.5% per annum, then why would they be keen to invest?," ET quoted Yashwant Dalal, president, Estate Agents Association of India, as saying. 
 
However, Pune, Hyderabad and Kolkata have still seen relatively better appreciation in home prices at 5-10%. 
 
(Image: Indiatimes)

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You Searched For "Yashwant Dalal" and got 3 results

Ban on Rs 500 and Rs 1,000 notes is going to jolt real estate. Here’s how

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Stagnant property prices cheer home buyers, become headache for investors

BI India Bureau

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