Ever since Prime Minister Mr. Narendra Modi announced demonetization of old 500 and 1000 rupee notes on November 8 2016, the country has been rattling the word over and over again in all contexts. It was a major blow to all the Industries which were majorly cash based. One industry which kept its eyes, ears and mind open was the real estate industry looking out for the exact consequence of the step taken up.
Though the initial speculation about the effect of demonetization on real estate sector was negative but on the go it was the reversal. The present environment in the sector has become more transparent and organized due to the advent of demonetization. It has given the investors solid reasons to invest in the market at this juncture. There are five genuine reasons why an investor can invest in the real estate at this point of time and they are laid out below for a clear understanding:
1. The huge inflow of money in to the banks due to demonetarization from varied segments of the country has led to huge deposits in the bank accounts. This resulted in lower loan rates and the access to easy home loans to people from banks. The lower rate of interest will stabilize the market and the pricing will be in favor of the customers.
2. The past projects which were stopped for the time being will be resumed with the liquidity in the market and the real estate people can avail loans to complete the pending projects as they are available to them on better rates now.
3. The infrastructural development on the national level can also be seen with the kind of liquidity demonetization has brought in. It can lead to better housing, road, rail network, bridges etc across the country for better infrastructure in the urban and rural areas on par.
4. The cashless economy will make the real estate sector more transparent as demonetization was focused on the same lines. The application of Aadhaar Card as the prominent identity proof in all the transactions and making cash transaction to the bare minimum, transaction through bank will make the real estate industry more transparent for the buyers and sellers. The process of registration and procurement will be much regularized with transparent process in place.
The above are the pointers which show that the realty sector is in for a boom with demonetization being the cause for the positive trend in the industry. This has opened doors for investors like venture capitalists, banks and private equity holders to invest in the segment to take on the win –win situation. The cities like Chennai which has flourishing real estate in places like Oragadam, Perumbakkam, Alandur, and Medavakkam are the target of good deals from people in middle class who love to own a house of their own.
Thus the present situation is the best time to invest in the real estate market going by the trend set in by demonetization for all.