PANJIM: Real estate, bullion market were the major stopover segments in the Indian economy, where cash element played a major role. Parking of cash was easy in these sectors and the service class people did imagine that post demonetisation they may have a outside chance to buy their dream property. Even though demonetisation has affected the cash flow in the market and brought in a momentary lull period, the sale of properties, specially land and flats continues to take place. The majority of the buyers are from outside Goa who have resources with them to buy homes for their leisure time.

“At present real estate industry is very badly effected but it may not be necessarily because of demonetisation but because of combined effect of Union budget proposals perceptions on incentives on real estate industry (which will be effective from 1st April 2017) combined with demonatisation. However, as on date we at Alcon have started feeling the improvement in sale, as many inquiries started pouring in since last one week,” said Mr Anil Counto, Chairman, Alacon Anil Counto Enterprises. 

He added that, “After November 8, 2016 sale has hit by about 75 per cent and it lasted till the first week of February 2017. There was public feeling that the real estate price will come down, but did not 

happen. In fact buyers were reluctant to shell out their tax paid amount for the purchase of real estate property. They were too accustomed to pay about 30 to 40 per cent of the sale value as black money to save huge stamp duty and registration charges.”

Demonetisation has largely impacted sale of large track of land and not built-up houses and flats, which is a small ticket usage driven, as cash transactions used to take place and people used to park their cash by buying large tracks land. Real state captains are of the firm view that built-up units like flats etc were primarily bought to use it rather than park the “available cash”. Cash does come into play that when developers have to buy land to build the unit. According to the real estate developers there may be corrections in land price and also in promoters margin but construction cost may not have substantial corrections.

“I think for any developer seriously in the business with a long term intent, there cannot be anything better than the cash element being eradicated from the market. It was a pain for all serious developers when a seller of land demanded cash from you, a buyer demanded that the developer should accept cash. But for us and our company along with other contemporaries it is a pain as we do not deal in cash,” said Mr Ashwin A Chandiok, Managing Director, AA Walker.

“I think demonitisation will definitely affect the economy and capacity of people to invests, but this hampers the investor market that Goa had already lost. I do not think it makes any difference to the end user market that is buying properties worth Rs 60 - 70 lakhs. We do not see a down in the real estate market in Goa. Yes there was a lull period for few days when people were playing the wait and watch game,” said Mr Sahil Adwalpalkar, Managing Director, Adwalpalkars and SinQ Hospitality Group.

Mr Uttam Dave, Managing Partner of Atmanya Projects LLP and promoter of Amoravida Goa when asked whether the property market has taken a hit post demonetisation, he said, “So far there is no evidence that the Goa property market has been hit in terms of demonetisation, save for the fact that sales have come to a standstill for a few months. There is a wait and watch attitude in the market, as no one quite knows whether prices will correct. The reality is that prices will not correct and sales will resume, perhaps by March or by April this year. There may be a  price correction of say 10 per cent due to the fact that Goa properties are aspirational.”

He further added that, “I see no correction in the affordable segment (below Rs. 70 lakhs); no correction in the lower mid-priced segment (say upto Rs 1.5 crore), perhaps a 10 per cent correction in the mid-priced segment (1.5 - 2.5 crore), and perhaps 10 per cent in the segment upto 2.5-3.5.crore. The real hit will be on luxury properties in the range of Rs. 7 crore and above, where values may fall 15-20 per cent.”

Mr Uttam Dave further added that, “The correction has been happening for some time now. The market has hit rock bottom in terms of correction, and it is unlikely that prices will correct any further, especially in mainstream markets, except in the super premium segment. There will certainly be a lull in sales till the mid year when sales will pick up again. Other factors support real estate prices being stable or even moving up, such as the drop in interest rates, of which more will come. The economy will also perform well. Goa state elections which are disruptive for markets will also be over soon.”