The real estate sector has taken a hit in Kozhikode since Prime Minister Narendra Modi declared that Rs.500 and Rs.1,000 notes were no longer legal tender.
Post-demonetisation, real estate agents say land transactions have come down as buyers and sellers both employ hard currency. “Besides, the weekly withdrawal restriction of Rs.24,000 has made people wary of the progress of the business. Only genuine buyers and property owners who are desperate to sell or buy land are entering into deals, ” C.P. Yahu, a real estate agent, said.
At the same time, land rates have become cheaper in many parts of the city. Previously, re-sellers as well as buyers had been insisting on cash in the payment of real estate transactions. But now, that mode of payment has drastically come down. Already, the real estate sector has been experiencing a lull after the State government enacted the Kerala Real Estate (Regulation and Development) Act and the Parliament legislated the Benami Transactions (Prohibition) Amendment Act. “Perhaps the correction could last four to six months, ” he says.
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Land rates
Previously, land rates on the stretch from Mavoor Road Junction to Pottammal Junction were between Rs.30 lakh and Rs.50 lakh per cent; on the Mini Bypass, Rs.10 lakh to Rs.15 lakh; and on the Malaparamba-Thondayad (Kozhikode Bypass), Rs.35 lakh to Rs.40 lakh. Now, these rates have come down. The demonetisation impact is also seen in residential areas at Civil Station, Malaparamba, Cheverambalam, Kottooli, West Hill, Karaparamba, Karikkamkulam, Puthiyangadi, Pavangad, Govindapuram and Panniyankara.
Documentations carried out at the Registration Department in Kozhikode have slowed. “The district had 6,500 documentations, including land registration, power of attorney and mortgage certification, a day earlier. Now, the figure has plummeted to 90 a day, ” an official said.
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The impact of the cash crunch has also resulted in several investors deciding not to honour the token amount paid to the buyer and thus backtracking from land deals.
“Many fear both the buyer and seller have to go through legal formalities in land agreements and that now a rule has come that all benami properties would be confiscated by the government, ” K. Sivadasan, a real estate investor said.