Jump In Real Estate Transactions In Gujarat Comes As A Happy Surpise
Those who watched the movements of India's real estate sector prepared themselves for doom and gloom when Prime Minister Narendra Modi in a sudden announcement on November 8 declared high-value currency notes illegal. Real estate observers, who focus on property markets of Gujarat, were quite concerned after the demonetisation move. After all, property deals in cities such as Ahmedabad see cash component in the range of 50 to 60 per cent.
Surprisingly, data from Gujarat's revenue department show a different story, and a one with a happy ending.
Sample this.
- The number of real estate deals in Surat witnessed a three-fold jump in December. In December 2015, Surat saw 7,500 sale transactions; this rose to 9,296 in December last year.
- Ahmedabad and Vadodara saw an increase of 200 per cent in the number of transactions. In Ahmedabad, numbers went up from 3,000 property transactions in November to 6,275 in December. In Vadodara, numbers doubled to 2,900 transactions.
- State capital Gandhinagar and other select pockets of Gujarat also witnessed an increase in the number of property transactions during the month.
- However, the total number of real estate transactions in Gujarat during declined 26 per cent in December 2016, when compared to the same period last year.
The possible performance boosters
- Many prominent developers in Gujarat say the increased numbers are a reflection of deals that were announced immediately after demonetisation.
“During the month of December, there were absolutely no buyers or inquiries. The entire real estate market had come to a standstill after demonetisation. So, the figures in government record books for the month of December are actually the deals that were immediately done by developers after November 8,” an Ahmedabad-based developer was quoted by The Indian Express as saying.
Another set of developers are of the opinion that the real estate market quickly absorbed the shock of demonetisation and sprang back into action.
- One of the reasons for the increased number of real estate transaction in the state is a reduction in home loan interest rates. After denometisation, several banks reduced rates by as many as 80 basis points.
- Buyers and sellers expected that the land valuation rates might increase. This led to an increase in the number of documents getting registered in December.
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