On 8th November, 2016, our nation suffered an economic heart attack that not only affected our heart, but also our mind and soul. ‘Demonetization’ – a masterstroke move by our honorable Prime Minister Shri Narendra Modi, turned the lives of people living in every nook and corner of our nation upside down, in just one midnight. Within a blink of an eye, Rs. 500 and Rs. 1000 notes lost their value and turned into just a piece of paper for us. Clouds of questions formed in each one of us that very moment – Why? What? When? How? Let’s decode the situation first.
The act of cutting the circulation of a currency unit of its status as legal tender is called demonetization. This secret financial surgical strike didn’t kill two but three evils in one shot – Terror financing, counterfeit currency in circulation and a parallel economy. As we know every coin has two sides, this also has its positives and negatives. Let’s dig deep into its impact on Real Estate, an overall contributor of 9 percent to India’s GDP and one of the most capital-intensive sectors in India. This being now the hotspot topic, rumors and news related to Real Estate are spreading like an epidemic. Here’s the view of Mr Chitrak Shah, MD of Shivalik, about the positive effects on Real Estate.
Realty industry will become crystal clear. The passing of RERA (Real Estate Regulation and Development Act 2016), the Benami Transactions Act and the current demonetization effect will make the real estate sector more transparent.
With banks flooding up with excess cash flow, home loans will become cheaper. The liquidity flow into the banks might ultimately lower home loan EMIs, which in turn will boost the real estate market, as homes will become an affordable investment.
Money will flow in the banking system from the unorganized and small scale sectors as well. Crores of new people entering the system means they too will be eligible to get bank loans and fulfill their dreams of owning a house.
In short, as it is said, every cloud has a silver lining, demonetization may have many pros and cons, but we must look at the bigger picture, which will definitely fetch results in the long term.