Latest Business News - After trying for four months to sell his apartment in a western suburb of Mumbai, Meher Verma decided to cut the price by 10 per cent. With property demand plummeting in the wake of November’s sudden ban on high-denomination notes, he’s not sure the reduction will do the trick.
“I was hoping to sell my house soon,” said Verma, who put his two-bedroom property in Andheri on the market for $400,000 in September. “Now it looks like I might have to cut my price or wait much longer for the market to improve.”
Real estate has long been a place where Indians have parked cash, often using money on which taxes haven’t been paid. Now, with the crackdown on so-called black money and the underground economy, real estate is taking a hit. The rate of home sales has fallen by about half since the government acted in early November, according to an estimate from Khushru Jijina, managing director of Piramal Fund Management. Home prices may decline 20 per cent and land prices could plummet as much as 25 per cent, according to analysts’ projections.
“Those who were looking to buy property as an investment vanished overnight from the market after the cash ban,” said Aubrey Carvallo, a Mumbai broker who has never seen demand in Mumbai so low in his two decades of working in the industry. He’s been unsuccessfully seeking buyers for eight apartments with prices starting at Rs 1.5 crore. “They are thinking of moving to stock markets and other financial assets, as real estate prices are set to correct in the coming years with the government crackdown on unaccounted money.”(Read More)
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