CHENNAI: Real estate developers bore the brunt of demonetisation with residential property sales falling by as much as 44 per cent during the October-December period compared to the same period last year, says a report by Knight Frank, a real estate consultancy. This, says the report released on Tuesday, is the lowest in six years — resulting in `22,600 crore revenue loss to builders.
Knight Frank tracks primary housing markets of eight cities – Delhi-National Capital Region, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. According to the report, new launches were down 61 per cent during the period under review.
“Political stability, regulatory environment, enhanced infrastructure, strong investments, approval to the GST Bill amendments to Real Estate Investment Trusts led us to the feeling that the year would end on a high note. However, demonetisation pulled down October-December sales across all cities,” said Shishir Baishali, CMD, Knight Frank India. Further, the government lost `1,200 crore in stamp duty revenue in the residential segment, the report noted.
Delhi was the most affected city, witnessing a 29 per cent decline in demand and 73 per cent fall in supply, while the Mumbai Metropolitan Region saw launches plummet by 53 per cent and sales by 26 per cent, the report said. Bengaluru, which is seen as a resilient market, saw a fall for the first time since 2013 with new launches and sales declining 17 per cent and seven per cent, respectively.
The report also states that the uncertainty is likely to continue over the next few months. “It will be important to see how developers recalibrate their business to the changing environment, and whether buyers capitalise the opportunity of various reforms and change,” it added.