KOLHAPUR: City-based real estate developers have claimed that demonetisation of old high-value will have very little impact on the sector and help customers find homes at cheaper rates. The common understanding is that the real estate and bullion trade involves high amount of black money transactions. As a result, the sector will be badly affected and the property rates will reduce immediately.
However, developers claimed that the use of black money in the sector is high in larger cities, where the decision will have a huge impact.
Mahesh Yadav, president of Credai (Kolhapur), said, “The decision has led to an increase in the currency stock of banks. Banks are now supposed to reduce interest rates, which will help customers buy flats or houses easily. At present, the temporary cash crunch has not stopped customers from buying homes.” Ever since the decision was announced a few days ago, experts have been claiming claimed that land rates will come down suddenly, and the rates of flats and houses thereafter.
Yadav said since the ready reckoner rates are more or less equal to the market rates for Kolhapur, there will not be a major change in land prices. Moreover, it is speculated that eviction of black money from the sector will help bring the construction cost down by at least 20%. At present, the sector is facing a slowdown and the developers are unable to sell flats because of capping of prices on the higher side.
Ajit Narke, a city-based developer, said, “People have a golden opportunity to invest in real estate in the near future. The developers based in Kolhapur get very less margin as against those in other big cities. Therefore, the chances of pricing coming down are bleak at present.”However, some developers admitted that the sector will be hit badly because of halting of cash flow and restrictions on deposits in the banks. However, institutions such as Credai are keeping a watch on the market.
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