Rs 500 and 1000 rupee effect on Real estate

[szammus]

Real estate experts, Financial experts. What is your thoughts on economic situation and real estate transaction impacts after the Government announcement for banning 500 and 1000 denomination bills.

[Sree0909]

Good times are finally here. Undoubtedly Real Estate is the biggest biz that will impacted due to the currency ban. Those looking forward to buy property in the next one year will have plenty of bargain deals. I believe there would be a correction of at least 30% from the current price points.

[msn1270]

There can be sudden drop in no of transaction due to currency crunch where cash transactions is required to register the property just on the guidance value rather than the market price. But will gradually pick up in the coming quarters once the daily cash exchange limit is over. If at all any impact to be realized in terms of price correction, we need to wait for at least 3-6 months.

Moreover Assembly elections are there in 2018. So not sure, how many real estate developers are able to really cut their margin, as they are all related to political class and the main source of their election expenditures to be freshly accumulated in the next 1 year.

[szammus]

Looking at the current situation only the usual daily commodity transactions are greatly effected. Once the proposed currency/new currency 500,2000 is out real estate will definitely see the difference in the way transactions would be handled. Might change the way money transaction takes place but will not diminish the property value for sure. Matter of 5 - 10 years things would be back to normal as of yesterday before (09/11). Cause the actual system how that works in india is not changed. Govn, officials still dependent on bribery, Politicians are still main agents for Money laundering, Small to large scale business man still knows how to curb on tax money.

Off course now with this being changed now people will be more vigilant as to invest in some sort of investment rather than to have liquid cash.

[SPRA]

Initially there will not be any transaction, as people will be busy tying to consolidate their Cash Position by remitting the amounts to their Bank Accounts. Because of Demonitization, people will distribute their Cash Assets in Other Assets. So, even though initial small fall may be noticed, all other Assets like Gold & Land will appreciate within 6 moths max from now. Demonitization will be done periodically till plastic money Transactions will cover 95% all financial transactions.

[msn1270]

If at all we need to see some major changes & transparency in the sector, all responsible Indian citizen's must stop encouraging the cash component in all property transactions. We should not expect property price correction on one side & still want to continue the unaccountable cash transaction to buy any property, just to save a small percentage of registration value. we must come out of our comfort zone and be open to register the properties at the market value rather than the guidance value. Then only all the developers and the sellers also change their attitude and everyone will be part of the black money eradication program initiated by the honorable prime minister in our country.

[niarhab]

Agree with you MSN. That's the way forward for the country.

[Mahanu]

Agree with MSN. The day is not far when there will be predominantly cashless transactions....These kind of issues of registering property at lower value and paying the balance in cash, will be automatically stopped, once the ceiling on Max amount of cash transactions.

But I think, our PMs speech yesterday was very effective... He made it clear that the next to come in the radar is 'Benami Property'

[SPRA]

I totally agree that the CASH transactions as 'Black Money' generator , should not be part of anything. How to actually make it happen ?. One of the ways to reduce this would be to FIX Registration & Stamp Duty based on the Govt. assessed value irrespective of the actual Transaction. In my view this will reduce huge amounts of unaccounted Cash components including the bribes to be paid. This also makes the transaction smooth as Full money can be transferred at the time of Purchase with the Bankers lending the money as Loan viewing the document reg. in-process based on the advance in paid in cheque.