Mumbai: The number of new launches and sales in the residential real estate sector fell to its lowest level since 2010 as demonetization pulled down the last quarter sales across all cities in 2016.
According to consultant Knight Frank, sales volumes and new launches slumped 23 per cent and 46 per cent respectively in the second half of 2016.
The slump in sales during the Oct.-Dec. period resulted in a notional revenue loss of Rs 22,600 crore to the industry. Even the state governments suffered a notional loss to the tune of Rs 1,200 by way off lower stamp duty collections.
“Uncertainty is likely to continue in the next quarter. It will be important to see how developers recalibrate their businesses to the changing environment and whether buyers capitalize the opportunity of various reforms and change their status quo position of ‘wait and watch’” said Shishir Baijal, MD, Knight Frank India.
Another survey undertaken by State Bank of India (SBI), the country’s largest public sector bank in terms of assets revealed that the construction sector and the informal roadside vendors were the worst hit due to the demonetization of high value currency notes.
The survey found about 69 per cent of the respondents affirmed that their businesses got impacted due to the government’s latest effort to fight black money in the system. Despite the loss in business, the survey said a majority of the participants (63 per cent of the sample) approved the method adopted by the government to unearth black money. However, they were of the opinion that the supply of only Rs 2,000 denomination notes without intervening notes of Rs 500 has resulted in chaos.