The Indian real estate sector suffered a revenue loss of around Rs 22,600 crore because of decreasing residential sales in the fourth quarter of last year on account of demonetisation.The Mumbai market was the worst hit with a notional loss of Rs 9,100 crore followed by Bengaluru (Rs 4,800 crore) and NCR (Rs 3,700 crore).
The state governments too lost Rs 460 crore, Rs 240 crore and Rs 260 crore in Mumbai, Bengaluru and NCR,respectively, as stamp duty during October and December 2016, says a report by Knight Frank titled India Real Estate. The notional loss to the various state governments on stamp duty collection has been in excess of
Rs 1,200 crore during the last quarter of 2016.
The estimates of the losses are notional which means that these losses can be recovered if the impact of demonetisation is positive in the next three to six months, say experts. More clarity is expected after the budget and once the Real Estate (Regulation and Development) Act, 2016 comes into force.
The fall in housing sales and new launches were so severe during the last quarter of 2016, that it brought down the entire second half 2016 numbers down by 23% and 46% respectively compared to the second half of 2015, says Samantak Das, chief economist and national director (research) of Knight Frank India.
Due to the slowdown in sales the last quarter of last year on account of the note ban, sales volume in the top eight cities dropped by 9% in 2016 to 244, 680 units from 267,960 units in 2015, the report says.
“The government’s demonetisation move on November 8 last year brought the market to a complete stand still and against this backdrop, developers refrained from announcing new launches and buyers became cautious before committing on purchases,” adds Das.