While the demonetization move by the Prime Minister was hailed as a master stroke by many pro government pundits, the move spelled doom for many unregulated and unstructured markets, real estate being one of them. While the move came as a sudden blow, the real estate market of Delhi and NCR region literally dried up overnight and the prices took a sharp blow. Property in Delhi NCR was hitherto highly disorganized and the market was growing well due to the influx of corporates, interest of investors and buyers of residential flats in apartment complexes and colonies.
The infrastructural developments and the increasing administration help towards developing these regions was actually working and rates were rising due to the increased convenience. However, the demonetization move came very suddenly and affected the entire market which was till now functioning mainly on cash payments at every rung of the hierarchy.
As per the survey,
The property prices in Delhi NCR region as well as Delhi region saw a sharp slump after the demonetization move and the transactions involving flats in Delhi NCR almost dried up by several percentage points.
The most attractive zones in the Gurgaon, Noida, Faridabad, Ghaziabad and Greater Noida area which were seeing a lot of new projects, both corporate and residential ones, suddenly fell short of takers and the pending cash which was to be paid for booked projects was also held up due to the move.
In an industry where the rich investors use their black money for deals to convert it into white, the move hit the property market and there was a slump there. The overall number of Benami transactions also fell in the aftermath of the move as per the report.
The report mentioned that the market took a hit due to the sudden nature of the announcement and the sudden panic created amongst the investors who were hoarding black money.
However, the fact that the real estate market again picked up in a couple of months and the property in Delhi NCR was again gaining the importance which it enjoyed earlier, made it quite evident that the initial hit for the time period was majorly due to the demonetization move and nothing else. But even after so many months of the move, the market is still far from stabilized as a lot of changes have swept in due to the demonetization move in the way deals are done, payments are made, projects are announced and confidence is shown by the developers.
A host of Acts and laws enacted by the government in the aftermath of the demonetization move there was implementation of RERA and Goods and Services Tax as well as Benami Act and others in order to make the real estate sector more organized and familiar for the consumers, will continues to affect the real estate market. This is because the normal manner of functioning has been disrupted and new ways are being sought to bring things in line. As a result, flats in Delhi NCR are still under the radar of the market and it remains to be seen how well they do.