Primary Market Has Seen Smooth Business Despite Demonetisation
The primary market has seen smooth business in the last one week regardless of the changes made. Most of the transactions made are cashless and through legal channels hence there have not been any difficulties yet. In fact, this is a great move and we are hopeful that it will bring in more transparency in near future.
As for the commercial real estate segment, liquid money does not play much of a role since all transactions are made through cheques or online so there is going to be little or no impact at all. As for the prices, there will be no major change in this segment at least right now.
In the residential market, there might be a drop in prices by 30 per cent as an immediate impact since buyers are still in a state where they are sorting out their financials. However, with bank rates going down by 2017, things will get back to normal soon; in fact, rates will go up in the affordable housing segment. The luxury residential segment may seem to go down by 25 per cent or more immediately as the demand has gone down but it is likely to bounce back soon.
The only market that is likely to get affected is the resale market where most of the transactions are still made in cash. However, this too will be a short lived pain as this market too will have to go for cashless transactions.
This move is bound to bring in further transparency in the system with every penny getting accounted for. While the developments proposed by the government in the recent past have already brought in some amount of regulation, this step will aid in reducing the rampant use of hidden costs and corruption thus giving a lot of relief to buyers.
The market becoming more organised and regulated means lesser chances of any hidden costs in order to make extra profit, which would inturn mean corrected prices and the money going to the right place.
The last one year has seen a lot of positive changes coming in the real estate segment. GST, the Real Estate Regulatory Bill and now demonetisation — are steps that ensure that only honest players remain in the market which doesn't just increase the confidence in buyers but also among overseas investors. These moves also ensure removal of any kind of hidden costs thus reducing the chances of buyers of getting duped to a great extent.
While this step feels like a major inconvenience for many, it is actually a great step that will help us get a more regulated market where properties get sold at the correct price and all kinds of buyers are brought at the same level. While it is indeed a short or midterm effect, the coming year shall see a lot of changes in the trends and pattern of buying and selling.
Sushil Raheja is the CEO of Raheja Homes Builders & Developers. He has sold around six million sq ft of premises and land in around 12 years. His vision is to take the business to another level, creating around 10-15 township projects in the upcoming years.