Real estate sector to feel pain after demonetisation
India’s property market is poised for further declines as Prime Minister Narendra Modi’s move to crack down on unaccounted wealth hurts one of the key methods that buyers employ to purchase real estate.
CLSA Asia-Pacific Markets, Credit Suisse Group AG and Nomura Holdings Inc are estimating that property prices will fall further, after tumbling 20 per cent in the past three years. India will withdraw high-denomination banknotes in the nation’s biggest crackdown against corruption in almost four decades.
“Since black money played a role in real estate transactions, this crackdown is very likely to hurt the real estate market, which is already reeling under high inventory in top tier-cities such as Mumbai and Delhi,” said Sonal Varma, an economist at Nomura.