8:15, 8th Nov 2016 brought the stern mayhem across Indian Business sector when PM in an ad lib event declared the demonetization of Rs 500 and Rs1000 in next 4 hrs time. The one-hour speak of the PM left the whole nation with an angst effect and sleepless nights for numerous veiled millionaires sleeping over heaps of money mattresses. The real estate market is a breeding ground for the capricious use of black money. A good percentage of developers, homebuyers, and resellers persist on having hard cash as a mode of payment in real estate deals. The current ban on high-value notes is a blow to this practice and so expectations are of a slight slump in the realty sector. However, most cities remain unaffected by demonetization and one such city is Bengaluru.
CREDAI (Confederation of Real Estate Developers’ Association of India) stated that the demonetization would not affect the real estate sector in Bengaluru at all by appending that CREDAI supports demonetization movement commenced by PM Modi. Being the information Technology capital of India, the realty sector is driven predominantly by the salaried class in IT and ITES sector and is more consumer- centric, dealing mostly through banking channels.
There has been no impact of the demonetization on the primary real estate market of this city as the buying and selling of property, builder-buyer transactions are all made either through fund transfer of via cheques and so will not get influenced by this bold decision.
“There is discernment that property market was influenced on Wednesday morning because of cash flow crisis, but the buying-selling sector was not affected at all, all transactions went efficiently, and business was excellent because the market here has mainly been transparent and cash dealings are almost negligible,” the Chairman of CREDAI, Irfan Razack announced.
The cash exchange is more unbridled in the secondary market of real estate where cash is exchanged between the builders and the purveyor. It is in this division that cash exchange is ubiquitous. While addressing to media, he affirmed, “Whilst most of the transactions in Bengaluru are cash free, this has been a boon for the real estate sector. We see a very good lasting vista of the real estate industry expanding from this.” While real estate stocks crumble through the day, the fortitude among real estate experts was high who see enduring prospects for the industry by this decision.
CREDAI Bengaluru and Sobha Limited Vice Chairman and Managing Director JC Sharma added, “It is an incredible and audacious move by the government as lot of money will get into the banking system, listed individuals and planned players will not have an effect from this movement, and so there would not be much influence on realty sector demand and sales.” “The Indian real estate sector will be stronger, healthier, and capable of constant growth in extended epoch. At this present moment, there is no ground for developers and investors to agonize who have performed their dealings legally and transparently” he added.
