Real estate sector got a major hit in the aftermath of demonetisation, housing prices to drop by 30%

Real-estate-prices-Down

Housing prices in 42 major cities across the nation got a major hit as it could fall by up to 30% in upcoming 6-12 months following the demonetization drive, wiping off Rs 8 lakh crore  market value of residential properties sold and unsold by developers since 2008.

“In the aftermath of demonetisation impact on Indian real estate sector, market value of residential property of Rs 802,874 crore is expected to be wiped off in the next 6-12 months,” PropEquity said in a statement revealed the media sources.

PropEquity is owned and operated by PE Analytics, which is an online subscription of real estate data and analytics platform, covering over 83,650 projects of 22,202 developers across over 42 cities in India.

“As per PropEquity research, residential real estate valuation in the top 42 cities in India, sold and unsold, will take a tumble and fall up to 30% from Rs 39,55,044 crore by approx Rs 8,02,874 crore to Rs 31,52,170 crore,” it added.

As per the research the market price of 49,42,637 units, which have been built-up, under construction and currently launched properties, available and sold since 2008 for 42 cities.

While, the maximum fall on total market valuation is anticipated to be in Mumbai by Rs 2,00,330 crore followed by Bangalore by Rs 99,983 crore and Gurgaon by Rs 79,059 crore.

“Indian realty is now bracing for sub-prime level crisis, which is expected to deeply impact the core of unorganised real estate and black money,” PropEquity said.

“We expect lot of secondary market transactions (resales) coming down in volume. For every five buyers out there, there is only one buyer willing to pay all-cheque. And usually, people want to take at least 20 to 30 percent of the amount in cash, but this will now go away for the time being,” Samir Jasuja, CEO and Founder of PropEquity told media sources.

“There will be almost a complete stop in re-sales in the coming weeks as this move will take sometime for real estate sector to absorb,” he added.

PropEquity also stated that there have been ‘unprecedented transactions’ in past 15 days as many people trying to convert their unaccounted money into real estate.

“However this will also mean that we can expect more formal and organised developers to weather this storm and will relatively be in a better position in the next 9-12 months,” it said.

“In our view, there will be acute pain in the short-term but in the mid to long run it will be hugely beneficial for Indian realty as it will create lot of transparency,” PropEquity said.

Wefornews bureau

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