Is Noida Realty Hit By Demonetisation?

Prime Minister Narendra Modi announced a ban on high denomination currency notes on November 8, 2016, to curb black money and corruption. Its impact on real estate was felt across markets especially in property sales. The Gautam Buddha Nagar stamp and registry department fell short of revenue to meet the annual target. The stamp and registry department had an annual target of Rs 2,223 crore but managed to collect only Rs 1,761 crore between April 2016 and March 2017. The shortfall in the revenue may be due to the following reasons:

 Demonetisation

While the market was hit by a cash crunch, it was the stamp and registry department that felt the heat. Though the department accepted registration fee of Rs 20,000 in the old currency notes till December 15, the division still failed to meet the target for the financial year 2016-17. Industry experts quoted that the shortfall is at large due to the note ban as property buyers did not have any money to register the property. In fact, committees were formed to conduct an inspection drive in new housing societies to check if the buyers have moved in without registering the property, but this did not yield expected results.

Also Read: Is Demonetisation Illegal?

Slow sales

With a number of project delays and pending possession, real estate investors re-considered their investment decision in Noida. Since affordable property prices in areas such as Noida Extension and Noida Expressway were the main attraction for home buyers, real estate developers launched luxury projects priced at Rs 5,500 per sq ft and above in the same market. Now, as they are finding it hard to find the takers for such properties, this has resulted in a slowdown in the property market. As a result, sales have been impacted for the properties which are priced higher than the rest of the market, ultimately bring down the revenue for registry and stamp department.  

Stabilised property prices

Call it an after-effect of demonetisation or a natural real estate cycle, the resale market of Noida has stabilised as the black money component has been eroded from the transaction process. Hence, now the property is being registered at the actual cost or even lesser, resulting in flushing out the revenue for stamp duty department of Gautam Budh Nagar.

Also Read: How Demonetisation Has Affected Mighty Landlords

Note for buyers

While this may be a good time to invest in Noida property market due to available options in projects that are nearing completion, consider investment in properties which are being built by reputed developers. The developer community is in bargaining mood and if you are getting your home financed by banks, chances are high that you can get good deals on interest rates as well. This is certainly the best time to buy a house for a home buyer who is looking for a property for end-use. Those looking for investment options, consider purchasing in those projects which can offer you instant rental income.