Impact Of Demonetization On Real Estate

Demonetization is a process through which the Government or ruling party cancelling the legal tender status of a currency unit in circulation. After this act the currency does not have any value of it. The people could not make any transaction of buying or selling through it, the depositing of such currency has become illegal after it.

After demonetization the government fix a time period of changing old currency to new currency from the bank in the given time period. The demonetization of currency did not happen first time in India. In 1946 the Government has pulled out 500 or 1000 rupees note in circulation first time. The second time in 1977 the leadership of morarji desai (Janta party).

The recent demonetization step taken by the government is one of the most bold and sudden steps that is bound to impact every Indian and every sector of the economy. While the majority of the people have welcomed this bold step by the government except there are few opposition parties. We all know that Indian economy had been running on “cash”. With the announcement of demonetization, the government has seized up lakhs of crores of old currency notes of Rs 500 and Rs 1000 from the country and is still counting.

Why demonetization is necessary?

There is lots of reason for withdrawn of money which is in circulation similarly big amount of note like 500 and 1000 rupees note. A major achievement of demonetization has been that it has helped the government in tracking black money. The big part of black money was being used for funding terrorism, gambling, in inflating the price of major assets classes like real estate, gold.The government will get a good amount of tax revenue which can be used by it towards the betterment of society by providing good infrastructure, hospitals, educational institutions, roads and many facilities for poor and needy sections of society.

Impact in real estate

The impact of money demonetization on real estate is much higher as compared to any other sector as in the involvement of black money and cash transaction in this sector is much more.

It was a difficult move however it has greatly contributed in the standardization of the pricing in the sector. There is so much transparency now. From a developer standpoint it has immensely helped us in sourcing funding from the banks and we are assured that the source of our funding is genuine. Many people out there believe that demonetization had an adverse effect on sales, but that’s not true. It was the negative sentiment that the property costs will go down and that’s exactly what the people kept waiting for instead of investing. Beyond this it has also helped in creating a cleaner image for Real Estate.

The demonetization speculation around real estate has moved on to RERA regulation and the effects are substantial. As real estate sector reflects realism after the initial turbulence of demonetization, it is serving as a great opportunity for investors and will benefit the overall economy.

Positive impact in real estate industry

The demonetize helps very much in real estate industry. It enhance the chance of buying property by utilizing the money in the better way. The cost of real estate company becomes down price as well as taxes no one will buy property in wrong way.

Every property become white and no real estate builder bluff the buyers. The buyers feeling safe and buy property in quite better way.

 Benefits of Demonetization


  1. Reduce rate in home loans interest

RBI has declared rebate in home loan interest rate due to large amount of cash deposit in bank as effect of demonetization. It leads to small scale industrial sector by compelling these sectors to deposit their savings in banks.

 2.Crystal clear home buying process

Demonetization has started cashless economy. Card transactions are not only beneficial for customers in terms of ease of use and time saving but are also transparent in nature. Feel hassle free and same to carry large amount of cash.

3.Restoring the stalled projects

Projects that were stopped from long time is taking speed now due to demonetization. It is good time to invest in Real Estate.

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