The events of the past week have signaled an end of an era of cash transactions in Indian Real Estate. Sure, cash can still be used, but it seems that use of cash will decrease drastically in real estate transactions, perhaps a first in India’s modern history. Black Money, experts say will disappear (most of it anyway) from real estate markets across India. So, what does future look like for the Indian Real Estate? Square Times lists 5 pointers as to how Indian Real Estate would be in near future –
1) (End) Consumer is the king again – With the reduction of unaccounted cash, the end user would be the prime focus of attention for builders and developers. Small time investors, with large cash at hand, hoping to make quick bucks often ended up inflating prices. There have been instances of apartments being sold to multiple people even before possession was handed over. This was because of investors cashing on even a slight increase in price. Now, end users will be direct beneficiaries as a whole class of investors disappear. Sure, there would be investors too but only serious investors with long-term investment horizon.
2) Black Money out, technology in – Over the years, start Ups like Square Yards have been developing propriety technology to bring in a fair and easy payment system for real estate transactions. Now with cash playing a minor role, technology will be used big time. Take, for example, the booking engine developed by Square Yards where prospective buyers can pay booking amount online, through cards from the comforts of their home.
3) Correction in prices – A correction in prices is expected across property segments. However, it is yet to be seen how much it could be. Going forward, one can expect more stability in prices as black money used to have the power to disrupt prices. Clean markets are more stable, secure and transparent.
4) Transformation of brokers – Brokers and consultants have a pivotal role in real estate. The removal of black money from the system will move brokers towards consolidation. Brokers would have to get adjusted to the new money order and tie up with larger consultants to be more formally organized.
5) Status rise for Indian Real Estate – At present India is not considered as a major real estate market globally. It is very opaque and not at all easy to invest in. With the economy going clean and transparency coming in, India is now inching towards global standards and best practices in real estate transactions.