In November 2016, the Indian government demonetized high-value currency notes in an effort to combat corruption and illegal activities. This had a significant impact on the real estate industry in India, which was heavily reliant on cash transactions. Here are some of the key developments and changes that have taken place in the Indian real estate market since demonetization:
Increase in transparency
One of the primary objectives of demonetization was to increase transparency in the economy. This has had a significant impact on the real estate industry, which was previously known for its high levels of corruption and illegal activities. With the demonetization of high-value currency notes, cash transactions in the real estate sector were greatly reduced, and buyers and sellers were required to use formal banking channels for their transactions. This has made the real estate market more transparent and accountable, which is a positive development for the industry.
Reduction in property prices
Demonetization had an immediate impact on the real estate market, with property prices dropping in many parts of the country. This was due to a combination of factors, including the reduction in cash transactions and the slowdown in the economy that followed demonetization. As a result, buyers were able to purchase properties at lower prices, which was a positive development for the real estate market.
Increase in affordable housing
The reduction in property prices following demonetization led to an increase in affordable housing in many parts of the country. Developers began to focus on building more affordable homes, which helped to meet the demand for housing among the middle and lower-income groups. This was a positive development for the real estate market, as it helped to make housing more accessible to a larger segment of the population.
Rise in online real estate transactions
Following demonetization, there was a sharp rise in online real estate transactions. This was due to the government’s push for digital payments and the reduction in cash transactions in the real estate sector. Online transactions have made it easier for buyers and sellers to conduct business, and have increased transparency and accountability in the real estate market.
A slowdown in the market
The real estate market in India experienced a slowdown following the demonetization, due to a combination of factors, including the reduction in cash transactions, the implementation of the Goods and Services Tax (GST), and the general slowdown in the economy. This had a negative impact on the industry, with many developers struggling to complete projects and sell properties.
Increase in foreign investment
Despite the slowdown in the market, demonetization had a positive impact on foreign investment in the Indian real estate sector. The reduction in cash transactions and the increase in transparency made the Indian real estate market more attractive to foreign investors. This has led to an increase in foreign investment in the sector, which is a positive development for the industry.real estate in India after demonetization
Implementation of RERA
The Real Estate (Regulation and Development) Act, or RERA, was implemented in 2016, around the same time as demonetization. RERA aimed at regulating the real estate sector and providing protection to buyers. The implementation of RERA has had a significant impact on the real estate market, with developers required to register their projects with the regulator and comply with strict guidelines. This has helped to increase transparency and accountability in the real estate market and has provided buyers with greater protection.
Increase in affordable housing schemes
Following demonetization, the government of India launched several affordable housing schemes aimed at providing housing to lower-income groups. These schemes have helped to increase the supply of affordable housing in the country, which is a positive development for the real estate market.
In conclusion, demonetization had a significant impact on the Indian real estate industry, leading to an increase in transparency and accountability, a reduction in property prices, and an increase in affordable housing. While there was a temporary slowdown in the market, demonetization has ultimately led to a more stable and sustainable real estate industry in India. The rise in online real estate transactions and foreign investment, as well as the implementation of RERA, have all contributed to a more transparent and regulated real estate market. As India continues to develop and modernize, the real estate industry is likely to play an increasingly important role in the country’s economic growth and development.real estate in India after demonetization