The number of new launches of property in India has dropped dramatically since demonetization took effect on November 9th of last year. New launches from October to December of 2016 fell drastically as a result of demonetization. Builders across the country today have to be more cautious and learn to adapt to a more dynamic and rapidly changing environment.
Before Demonetization
Before
November 9th of last year, all looked rosy concerning the real
estate market in India. To any objective observer the real estate market in
India looked to be on the mend with a good future ahead. The festive season was
nearly in full swing and it was expected that realestate in
India would benefit immeasurably from the positive sentiment
across the country.
After Demonetization
Once
demonetization was announced, it dealt a giant blow to prevailing positive
sentiments across the country. Real estate transactions dropped considerably
once demonetization took effect. Housing demand across the country also fell
after demonetization was announced.
Builders Post Demonetization
After
demonetization was announced, builders decided to adopt a policy of wait and
watch in an attempt to judge market sentiments. They decided to delay launching
new projects. Reputable real estate consultancies have stated that the end of
last year saw the fewest number of new launches since 2010. Hence the number of
new projects in India launched last year was the lowest in nearly six years.
Sales volumes also fell by nearly forty four percent and the number of new
launches dropped by sixty one percent post demonetization. If not for
demonetization, last year India’s real estate sector would have ended on a high
note. Real
estate sites in India registered far lower traffic volumes post
demonetization.
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Demonetizations Impact Upon Different Cities
The two
of the largest real estate sectors of India bore the biggest brunt of
demonetization. New launches in the NCR fell by nearly fifty eight percent and
new launches fell by fifty three percent in the Mumbai Metropolitan Region
after demonetization soured market sentiment.
Bangalore,
long believed to be resilient to real estate trends, also suffered, although
not as much from demonetization as from the NGT order on lake beds and the
civic bodies drive targeting demolition of encroachments upon storm water
drains.
What’s Ahead In 2017?
Property in India is poised for better times
ahead say market oracles, the second half of 2017 is expected to be a good year
for real estate in India. Real estate in India in the second half of 2017 will be driven by stronger market
fundamentals than were present pre demonetization state experts.
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