That prices of immovable properties are likely to take a plunge due to monetisation is agreed upon by many, though the reduction is not even.
Prices of flats are unlikely to witness steep variation but those of house sites and huge open lands are anticipated to come down considerably. At least, that is what the real estate businessmen and agents operating in and around the capital feel.
Surely, all is not well with the sale and purchase of open plots in areas such as Medchal, Gachibowli and Keesara which witnessed roaring business during real estate boom. Many wouldn’t agree openly but it is an open secret that unaccounted money from people drives real estate.
In Tellapur area, coming under Ramachandrapuram of Sanga Reddy district, market value in localities close to Gachibowli is from Rs. 30,000 to Rs. 50,000 per square yard depending on proximity to main roads or commercial areas. But the Government value is not higher than Rs. 15,000 per square yard.
Naturally, buyers pay the amount equivalent to Government rate in white and the remaining sum is paid as ‘black money’. As per market value, even an open plot of 200 square yards costs Rs. 1 core. “How will any buyer bring Rs. 1 crore when currency notes of Rs. 500 and Rs. 1,000 denominations are banned?” asks Srinivas living in Tellapur.
This unusual situation is prompting buyers to move cautiously and postpone their transactions. The Registration department’s statistics of transactions before and after demonetisation confirm this. “That is not the case with prices of flats because mostly buyers issue cheques for advance payments which is less than 10 per cent to 20 per cent of the cost,” says Telangana Builders Federation vice-president M. Prema Kumar.
Majority of the persons buying newly constructed flats go for bank loan and there is no need for them to hide anything since they utilise provisions of income tax exemption, he feels.
For Satyam, a real estate agent, demonetisation meant a big blow to sale of open sites meant for commercial or residential purpose. “There used to be at least three or four inquiries about an open plot costing Rs. 50,000 a square yard. After demonetisation, just no one is inquiring about plots in that price range,” he shares his experience.
