BENGALURU: Fear gripped the real estate market in Bengaluru on Wednesday after the government’s decision to demonetise `500 and `1,000 notes.
Suna Miandad from Honey Properties said, “It looks like the real estate industry will be hit for at least a year. The genuine sellers and buyers have no problem but since 70 per cent of the money in real estate is black money, the number of buyers will significantly reduce and this will bring down the real estate prices. If a person receives black money, he will invest that illegally. This vicious circle continues. The government too is at fault. They have not conducted right checks. People pay the register fees as per the government valuation and they save the remaining money.”
Many believe it is the mid income level people who will suffer. Suna added, “The middle class wants to save from the little they earn and avoid paying tax. They will be the most hit. A CEO of a company earns 400 times more than the employees while the actual work is done by his staff. The CEO will not mind paying the tax. But the employee will try saving his money from the tax.”
Voicing a similar opinion Samir Arora from Confederation of Real Estate Associates (India) said, “Doing it without notice is not the right step. The small to mid income level people will suffer. In the short run, the prices are expected to fall and cash flow will be affected. But the good news is Bengaluru being an IT hub, it will have lesser impact compared to the rest of the country.”
On the contrary, many are expecting this move to help the sector grow in the long run.
Ashish Puravankara, Managing Director, Puravankara Projects Ltd, said, “This move is a game changer for the nation and will benefit the real estate industry over time. This will push for uniform pricing in real estate, thereby boosting consumer confidence and transparency.”
Shishir Baijal, Chairman and Managing Director, Knight Frank India agrees. “Prices coming down to more reasonable levels in the residential property market cannot be ruled out. The sector will be under serious pressure with number of transactions and prices seeing a substantial downward trend.”
Farook Mahmood, Chairman of Silver Line Realtors Private Limited, said, “I feel the real estate will not be impacted. Any organised builder will have no issues and any common man will have some inconvenience initially.”