Chandigarh: With the Indian government’s decision of scrapping currency notes of Rs 500 and Rs 1,000 denominations, the Real Estate Sector, already facing sluggish waters, will be the worst hit. After manufacturing and shopping of gold and consumer goods, real estate is the biggest sector notorious for blackmoney transactions.
The Real Estate Trade has been flourishing on black money transactions by ‘big sharks’ who have been evade taxes thus causing huge losses to the exchequer. Moreover, the decision will prove a nightmare for this sector and the property rates, jacked up by the realtors because of the influx of unaccounted money, are likely crash almost 20 per cent to 25 per cent down, opined experts.
The genuine sellers and buyers would be benefited and, in the long term, the decision will be fruitful for the real estate as the cash transactions would be transparent almost over six months to one year.
Bhupinder Singh Saini, a Derabassi-based property consultant and land developer, claimed that the blackmoney is involved right from land purchase, change of land use, getting approvals, construction and handing over to the user end.
Deepin Preet Singh, a Mohali-based realtor, was of the view that the decision would impact the Real Estate Trade in a big way as substantial amount of liquidity would be squeezed out of economy and speculative investors will withdraw while only end users would remain there.
“Globally, it is the investor who drives up the prices of Real Estate and not the end user,” he said adding that the Real Estate companies will not be coming up with new project.
Similar situation will continue for next over two years until the market matures, presumes Singh.
“The land purchase process for setting up of big housing, commercial and industrial projects involves huge amount and the buyers and sellers indulge in various practices to evade taxes. The decision will help curb tax evasion and thus impact all sectors directly or indirectly,” claimed Jeewan Naryal, a Gurgaon-based Chartered Accountant.
For more news updates Follow and Like us on Facebook