For a sector already in the doldrums for at least five years now, the Center’s move to demonetise high value currency last month has hit real estate in Delhi hard. Figures from Delhi’s 21 sub-registrar offices show a sharp decline in property registrations after Rs 1,000 and Rs 500 notes were withdrawn on November 8.
Consider this. In November 2016, property registrations declined by 38 per cent compared to the last month.
Between August and September, sale deeds decreased by 7 per cent and rose by 15 per cent in October. Compared to November 2015, registrations dipped by 16.4 per cent in November 2016.
Sources in the Delhi government pegged the dip in registrations in September to the shraadh season. “This is a period considered by many to be ominous for undertaking any business or new transactions. The shraadh period starts from the middle of September and usually ends by the first week of October,” a senior government official said.
Sources in the Delhi Revenue department point to the increase in transactions in October. “Property transactions picked up in October 2016 as it is considered an auspicious period,” an official said. Santhosh Kumar, CEO, operations, JLL believed that the shraadh and navratras play important role in real estate market. “In addition to the religious beliefs, many schemes are launched and discounts offered in this season to lure the customers and thus the sale deeds usually go up,” said Kumar.
In November, the decline was high in upmarket areas in South Delhi. A comparison between October 2016 and November 2016 showed that Sarojini Nagar witnessed a drop of 52 per cent whereas Defence colony showed a drop of 29.83 per cent, Mehrauli too went in slump with 24.77 per cent drop in sale deeds and Hauz Khas witnessed drop of 33.67 per cent.
According to Kumar, the residential sector seemed to be hit by demonitisation, a sentiment that was echoed even in official circles of Delhi government. “In the residential sector, secondary units — sold and bought for more than two times — are most hit. And we all know, the sector is cash driven,” said the CEO, operations, JLL, a real estate consultancy firm.
Kumar also added that the market also depends on demand and supply and this is the reason why the commercial sector is least hit. “The supply for commercial is on lower side compared to the residential. But, it is true that we are waiting and watching the impact of demonitisation on the market in the long run,” added Kumar.