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Impact of demonetisation on real estate sector
For all of us, owning a home is always a distant dream, gives freedom, security and stability. There is no denying that home ownership is one of the most coveted goals of home owners. But dream seems too far to achieve because prices are touching skies, which compel them to stay in rented properties.

Many scholars are spreading rumors that prices will fall by 50%; real estate sector will collapse etc. There has been a spate of differing opinions on how demonetisation is likely to impact the real estate. Buyers have shifted from buying to now renting at a large at pan India level. They all are waiting for price correction.

We have seen a shift in the preference of buyers whose initial choice was to buy a property, but now theyare looking for rental option after demonetisation. This will be an interesting trend to watch out far. Liquidity shortage and less cash to pay for basic utilities, the demonetisation has been automatic reaction to a wait and watch policy mode.

As of now it is expected that it will clean out black money from real estate and making property availability accessible to common man. The market is expecting a correction. This is the most anticipated fall out of the demonetisation event.

Prices will fall by 20-30%. The reason for such expectation is down fall of prices, interest rate decline and rise in demand, which will lead to growth of the realty industry. But in the final form the price correction may not be more than 8-10%.

There has been 37% decline in property registration across Mumbai alone since demonetisation. Moreover, people now understand the consequence of the mal practices that were prevalent in the market due to heavy cash preference looking at the intention and steps taken by the government.

Few have spread the rumor that the real estate sector will fall badly, but we should understand very clearly that there is a difference between Investor home and Actual home. Investor invests in property for wealth creation or for luxurious life, but the actual home users will still be looking for chance to make their dream true. It's not only a home for them, but they get very emotionally attached to it.

It's a very positive sign that the government is also taking initiative of housing for all by 2022 on Gandhiji's 150th Birth Anniversary. The year 2016 has laid the foundation for the strong future of the real estate industry. Policies like smart cities concept, Atal Aawas Yojana, GST, RERA implementation, demonetisation and Benami Transaction Act are all effective steps to boost the real estate sector.

The Reserve Bank of India (RBI)is also playing a very vital role by instructing banks to reduce deposit and advances rates which will increase buying power of the people. Government and its all regulating bodies are taking keen interest and effort for nation's prosperity.

Now, it has become duty of all individuals to put their efforts, keep integrity towards nation and let make demonetisation step a game changer initiative for all of us. All Financial institutions must work for financial inclusion and might play an important role by funding the dreams of prospective home buyers.

I believe and hope, we are heading in right direction. We all will witness tremendous changes in the economy within few years and it would not be wrong if I say that demonetisation and government's initiative will lead us to a new height.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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