It was on 8th November that demonetisation was announced in the country. It was peddled as a surgical strike against black money.
After the implementation of demonetisation following changes were witnessed in the economy –
- First, the GDP growth has come down to 6.1 per cent and 5.7 per cent in Q1 and Q2 2017, respectively. It is believed to be a temporary phase and in coming quarters Indian economy is expected to grow faster.
- Secondly, the Business Confidence Index has risen to 64.1, from 56.4 in Q1 2017.
- Additionally, due to the continuous efforts by the government, India also jumped to 100 from 130, in the ‘Ease of Doing Business’ rankings, making it the first country to record the highest jump in the World Bank’s rankings.
The demonetisation wave seems to have settled down and the prospect for the real estate sector looks promising. During the last one year, apart from demonetisation, the real estate sector also witnessed several significant policy reforms, such as the implementation of the Real Estate (Regulation and Development) Act in several states, the nationwide implementation of the Goods and Services Tax (GST) and amendments in the Benami Transactions (Prohibition) Act.
Check Out: Trimurty’s RERA Registered Projects – Ariana & Arabella
Impact on different real estate sectors
Residential sector: Affordable housing in vogue
Post demonitisation the sales in the secondary residential market, especially in the luxury segment, were impacted. However, the transactions in mid-segment and affordable housing remained less impacted and buyers’ preference remained tilted towards ready-to-move-in houses.
Due to continuous support of the government and its push towards the Pradhan Mantri Awas Yojana, the affordable housing segment should pick up and more developers and investors will try to invest in this segment.
Commercial markets: Investors remained active
After demonetisation, the commercial leasing market remained, while commercial strata sale was impacted to a certain extent. There was a temporary slowdown in the overall transaction volumes, in the first few months post-demonetisation. However, a year after demonetisation, investor activity seems to be picking up, on the back of improved investor confidence and several major transactions have been concluded. 2018.
Long-term forecast for real estate, post demonetisation
All the policy reforms, especially RERA and GST, are helping in aligning the real estate sector to the international standards of doing business. It will encourage the entry of more foreign entities (developers and funds) in the Indian market and more liquidity for the Indian developers who have an established track record. Research remains positive about the prospects of all commercial and residential real estate markets in the long run.
