How the change in Financial System will Impact Real Estate Sector

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Real Estate India

When we talk about the contemporary scenario of India than “Demonetization” is the most trending topic. This sudden change in financial system has created lots of debates and arguments.

Let’s see how Demonetization will impact to real estate sector, realtors and buyers.

Firstly, let’s start with residential real estate, when we talk about residential real estate sector especially affordable, resale and middle housing section, it will be least impacted in big cities as largely buyers require loans, as today home loans are available up to 90 % , So there are minimal cash transactions. But yes there will be more transparency, no chance of cheating.

There will be a maximum impact in small cities where transactions are primarily made through cash. Especially, when it comes to agricultural land deals, where cash plays a significant role in transactions.

The professional, well organized, large companies will be impacted least as because of their strong and experienced background in the real estate sector as cash transactions doesn’t play a significant role. But small and new developers will face maximum impact as cash transactions are the most important component for them. Retailers can also face some challenges due to the reduction in cash transactions. There will be negligible impact on hospitality and hotel related real estate.

However, this measure is to curb black money especially in luxury , high  segments as there are incidence of acceptance of black money has been seen. Demonetization will increase transparency and credibility in the real estate sector. Hopefully, this Curse of black money & corruption will disappear from this sector and the overall economy. Also, Real Estate Regulatory Authority (RERA) will also bring accountability in this sector.

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