Getting you in the flashback... remember the day and date when a big step Demonetization was announced?
Of course how one can forget this day when the India's biggest currency notes were banned. Yeah, the horrifying night when everyone was in rush to change the remaining currency and to get the new notes because the old ones were not valid from then.
This drastic and momentous step taken was actually the measure to eradicate black money that has hit the real estate badly.
As an asset class, real estate has been the big source of Indian economy and the black money as well. The cash is the essential part of real estate and is important and used at different levels. From booking to the paper procedure; brokerage to land price; etc. everywhere cash is paid out and at the high segment.
In the secondary market, nearly 30% is Black Money and in the primary market, the cash is used for home purchases. Rather than any bank transactions and loans the builder or the mediator prefers cash. Why because there is some amount of inappropriate unit in it.
The offerings like underwriting and pre-launches also involve cash payout; where the buyer does not know how the price hiked so much.
This spectacular step has somewhere affected tremendously the real estate sector. Being coupled with the Benami act the properties purchased and sold without any name will be curbed. These steps were only taken to clear up this industry.
Demonetization affected the liquidity in the capital-intensive real estate sector, deepening the problem of massive fund shortage/cash crunch faced by developers reeling under delayed deliveries, which deterred buyers from purchasing the property. This was the sudden shake but the further steps that were taken by the government have proved to be the big helping hand. It also boosted the foreign funding.
The impact was majorly seen in the luxurious segments. Then we welcome RERA and GST open- heartedly. RERA made it possible for every single dreamer to fulfill their dream of home buying. GST has made the nation free from other taxes and now just lived under one tax i.e. GST.
One important positive impact of demonetization and RERA (Real Estate Regulation Act) has been that speculative investors deserted real estate and end-users/genuine buyers, who were sidelined are now in the race to make their one.
RERA has some where promoted Affordable housing and the government different schemes have made it possible for everyone to own a home with lesser prices.
The Demonetization has boosted the sectors, the transparency in the paperwork and the transactions through RERA and the numerous tax deductions from GST; together they have come as big bang move for Real Estate sector.
Now don't let your dreams stop; the sector is all set to clear with the culminating steps taken by the new government just for your improvisaton. So make sure you don't miss now.
