The highly ambitious decision by the central government to demonetize high value notes has weakened the demand for real estate in Noida.There has been a dip of nearly 80% in enquiries and the worst hit housing segment has been the secondary market.
Most prospective buyers of property in Noida are waiting and watching events as they unfold before committing to a real estate buy. However this is not the end of property in Noida as industry insiders expect a new dawn for Noida property once the dust clears and customers have greater clarity.
While there was initially a great deal of uproar in the NCR when demonetization was announced, particularly from builders in Noida, and from other parts of the NCR because they held a great deal of inventory, industry insiders see the move by the center to usher in a new dawn for realty in Noida.
The real estate industry in Noida and the NCR has come to a grinding halt while the center continues to chant to the public the mantra that there is no gain without pain. The buying and selling of apartments in Noida and apartments in other parts of the NCR has come to halt with buyers adopting a wait and watch approach before investing in the market.Experts meanwhile claim that demonitization along with the Real Estate Regulatory Act will lead to a new era in the nation’s real estate market.
Lower Margins Between the Primary and Secondary Markets
Insiders believe that the countries real estate market has been a safe haven for those with black money as much of the transactions in real estate in India have a significant amount of unaccounted for money. Additionally experts believe that the countries real estate market will become less liquid for some time as it adapts to new and exceptional circumstances. Sales of properties in the secondary market are expected to be hit harder than properties sold in the primary market. Those who wish to buy properties in Noida will likely wait for a time testing the waters before taking the plunge.
Primary Market Versus the Secondary Market
Although the sales of property in Noida and other parts of the NCR have dropped drastically and enquiries have also dropped by nearly eighty percent, experts believe that in the future there will be a greater incentive to invest in the primary market as the secondary market shall lose its charm as an asset that serves as a safe haven for parking ones black money. It is expected that buyers shall now shift their focus to buying directly from builders in Noida as the primary market will become more attractive than the secondary market since the incentive shall be to own an accountable property with accounted for money rather than to invest in property to park ones black money.
A Plus For Property in the Long Term
Experts working with multinational real estate brokerages believe that in the long term demonetization shall be a huge plus and it will allow capital values to soar to new heights within a few years.
The drop in the price of real estate in Noida today shall be compensated for within a few years as prices soar to values which would not have been attainable if demonetization had not been implemented.Some expect an upswing in the price of residential properties in Noida of nearly ten to fifteen percent within one to two years. An unintended impact of demonetization has been an upswing in the rental market in Noida as many have deferred their decision to purchase their home and opted to live in a rented property instead. Builders in Noida and in other parts of the NCR await a return to normalcy which they hope shall begin within one to two quarters.
The homebuyers fraternity is expecting discounts from real estate developers in Noida some however state that the true effect of demonetization shall not be known until April 1st 2017.