Black Money In Housing Deals Recede Significantly By 75-80% Since Demonetisation

Black Money In Housing Deals Recede Significantly By 75-80% Since Demonetisation

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Business oi-Roshni Agarwal

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The real estate sector is out of the woods since the demonization was announced on 8th Nov 2016 and after it multiple laws and regulations, schemes and funds have been announced for regulating and boosting the real estate economy as a whole.As per Anarock Research, sales in the Indian housing market have outperformed new supply.

Black Money In Housing Deals Recede Significantly By 75-80% Since Demonetisation

Black Money In Housing Deals Recede Significantly By 75-80% Since Demonetisation

Referring the same, Anarock Group chairman-Anuj Puri said, “A notable impact of the triple whammy of DeMo, RERA, and GST was a significant deceleration in new property launches. ANAROCK data shows that in the pre-DeMo period between 2013 till Q3 2016, the top 7 cities saw approx. 16.15 lakh new units launched while the post-DeMo period (Q4 2016-Q3 2021) saw 9.04 lakh units launched in the top 7 cities – a drop of nearly 44% between the two periods.”

“In the pre-DeMo period, new supply outstripped housing sales – whereas in the post-DeMo period, housing sales overtook new supply in the top 7 cities,” added Puri.

Now after this tumultuous period and a substantial market shift, the current trend of sales outstripping supply shall persist even as real estate players are keeping a close eye on the demand-supply gap. So, as we are witness to the housing market has come up strong, with speculative buying and selling now taken the backseat and instead end-users taking on the market. Further, luxury housing segment which also dealt a huge blow after DeMo, has seen remarkable recovery as the pandemic resulted in latent demand to come through strongly.

Effect of cash transactions in real estate

The resale housing or the secondary sales market proved to be more susceptible to demonetization in comparison to the primary market (sales by real estate developers). Historically, this segment together with the luxury housing space drew the most ‘cash component’. Though the resale housing is still recovering from the DeMo upshot, affordable and mid-space housing demand in primary sales picked up.

Is cash component completely done away with in the Indian Housing?

“Not completely,” said Puri. “However, unlike earlier, people no longer buy homes primarily to get rid of black money – they now buy them because they want to own homes. Most of the end-users now majorly driving housing sales expect their property transactions to be transparent and above-board. Nevertheless, black money is still finding its way into property transactions in smaller towns and peri-urban areas. Overall, the use of black money in Indian housing has reduced by at least 75-80%.”

The one major reason that plays out here is that listed branded players attracting huge demand to their projects abide by the law and avoid illegal tender money in their dealings. Post DeMo and the introduction of RERA and GST, there is seen a shift in homebuyer preference towards branded projects. Top players in the segment are now catering to the evolving demand in the affordable and mid-segment housing space.

GoodReturns.in

Original news source Credit: www.goodreturns.in



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