Demonetisation will slash real estate prices

buy canada goose jacket cheap After demonetisation, a prominent economist tweeted that 19% of India’s employment share contributed by the real estate sector will be jeopardised. buy canada goose jacket cheap

It was also reported in late November that housing prices could drop by up to 30% over 6 to 12 months after demonetisation, wiping out over Rs 8 lakh crore of canada goose clearance sale the market value of residential properties sold and unsold canadian goose jacket by developers since 2008.

canada goose black friday sale The real estate sector has been in the grip of a slump for some time now, because of distorted prices, which make it impossible for even high income groups to buy a house unless they have unaccounted money. canada goose black friday sale

Indian professionals earning well let alone average Indians are nowhere near being able to buy a house with a super built up area of, say, 1,000 sq ft in a city at the prime of their lives.

canada goose factory sale Mumbai leads other cities in price of property, which Canada Goose Outlet varies between Rs 1.3 crore (Rs 13 million) and Rs 2.9 crore (Rs 29 million). canada goose factory sale

The price in other cities varies between Rs 30 lakhs (Rs 3 million) canada goose coats on sale and Rs 60 lakh (Rs 6 million).

canada goose uk outlet On the basis of per capita income, it may take 30 to 60 years for a Mumbaikar Canada Goose Parka to own a flat. canada goose uk outlet

cheap canada goose uk For residents of other cities, it may take 12 to 24 years. cheap canada goose store canada goose uk

Since housing loans are provided in such a way that canada goose coats the EMI does not exceed 47% of monthly incomes, the EMIs may last for 60 to 120 years for Mumbaikars and 24 to 48 years for those in other cities.

Advisory firms on housing even prescribe that those who don’t earn at least buy canada goose jacket cheap Rs 25 lakh (Rs 2.5 million) a year should not seek to buy a house in Mumbai.

canada goose coats on sale In other cities, the minimum threshold is in the Rs 12 lakh to Rs 20 lakh (Rs 1.2 million to Rs 2 million) range, canada goose and those earning less are advised to rent a house. canada goose coats on sale

Even to generate the amount required for the down payment and stamp duty, an average Indian has to work for a decade or two.

In this backdrop, people conclude that a rented house is a better option than buying a house.

As a result, the inventory period of newly built houses went up from 23 months to 83 months in these cities.

Despite such unsustainable canada goose outlet inventory periods, builders did not reduce prices, taking new loans from banks and using them to pay back Canada Goose Jackets old loans.

Canada Goose sale The business model followed by a sizable canada goose deals segment of the real estate sector is unsustainable, as the cash component of transactions is typically not less than 30% to 40%. Canada Goose sale

Canada Goose Parka With unaccounted money flushed out of the system, builders cannot expect buyers to buy houses at pre demonetisation prices. Canada Goose Parka

Canada Goose Jackets The Real Estate (Regulation and Development) Act 2016, which has canada goose clearance already been passed by Parliament and awaits enforcement by state governments, is like the Sword of Damocles for the real estate sector. Canada Goose Jackets

canada goose clearance sale Some of its features such buy canada goose jacket as prices based on carpet area instead of super built up area, and avoiding delays as 70% of money paid by the buyer should be in the respective project account make real estate projects more transparent and accountable. canada goose clearance sale

canada goose The saving canada goose black friday sale grace for the developer in this act is that it is applicable only to new projects. canada goose

cheap Canada Goose In this context, builders have two options left. cheap Canada Goose

canada goose coats The first is to realise that this new normal cannot be changed, and to sell inventory cheap Canada Goose at the earliest at a discounted price and pay back the loans that were raised from banks, thereby at least saving on interest payments. canada goose coats

canada goose uk shop The second option is to wait for black Canada Goose online money to accumulate afresh, so that property may be sold at pre demonetisation prices or more. canada goose uk shop

Given the huge inventory of houses and the intentions of the government in bringing all big transactions under electronic mode, the second option may remain a chimera.

Canada Goose Online Either way, builders will lose part of the money they have extracted from buyers in the last two decades Canada Goose Online.