De­mon­eti­sa­tion: ` 22,600 crore loss for real es­tate sec­tor

Hindustan Times (Chandigarh) - Estates - - ESTATES - Van­dana Ram­nani van­dana.ram­nani@hin­dus­tan­

The In­dian real es­tate sec­tor suf­fered a rev­enue loss of around ` 22,600 crore be­cause of de­creas­ing res­i­den­tial sales in the fourth quar­ter of last year on ac­count of de­mon­eti­sa­tion.The Mum­bai mar­ket was the worst hit with a no­tional loss of ` 9,100 crore fol­lowed by Ben­galuru (`4,800 crore) and NCR (`3,700 crore).

The state gov­ern­ments too lost ` 460 crore, ` 240 crore and ` 260 crore in Mum­bai, Ben­galuru and NCR, re­spec­tively, as stamp duty dur­ing Oc­to­ber and De­cem­ber 2016, says a re­port by Knight Frank ti­tled In­dia Real Es­tate. The no­tional loss to the var­i­ous state gov­ern­ments on stamp duty col­lec­tion has been in ex­cess of ` 1,200 crore dur­ing the last quar­ter of 2016.

The es­ti­mates of the losses are no­tional which means that these losses can be re­cov­ered if the im­pact of de­mon­eti­sa­tion is pos­i­tive in the next three to six months, say ex­perts. More clar­ity is ex­pected af­ter the bud­get and once the Real Es­tate (Reg­u­la­tion and De­vel­op­ment) Act, 2016 comes into force.

The fall in hous­ing sales and new launches were so se­vere dur­ing the last quar­ter of 2016, that it brought down the en­tire sec­ond half 2016 num­bers down by 23% and 46% re­spec­tively com­pared to the sec­ond half of 2015, says Sa­man­tak Das, chief econ­o­mist and na­tional di­rec­tor (re­search) of Knight Frank In­dia.

Due to the slow­down in sales the last quar­ter of last year on ac­count of the note ban, sales vol­ume in the top eight cities dropped by 9% in 2016 to 244, 680 units from 267,960 units in 2015, the re­port says.

“The gov­ern­ment’s de­mon­eti­sa­tion move on Novem­ber 8 last year brought the mar­ket to a com­plete stand still and against this back­drop, de­vel­op­ers re­frained from an­nounc­ing new launches and buy­ers be­came cau­tious be­fore com­mit­ting on pur­chases,” adds Das.


NCR real es­tate mar­kets have lost ` 3,700 crore on ac­count of the de­mon­eti­sa­tion in the last quar­ter of 2016.

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