Housing sales dip 44% after currency withdrawal: Report

The Hindu
The real estate sector is estimated to have suffered notional revenue loss of ₹22,600 crore in the fourth quarter of 2016 as sales plunged 44 per cent as compared with the same period last year due to demonetisation, according to real estate consultancy Knight Frank India. "The Indian government's demonetization move on November 8 brought the market to a complete standstill," Knight Frank India said in its half yearly report on the sector. "Against this backdrop, developers refrained from announcing any new launches and buyers turned extremely cautious before committing on purchases. "The drop in sales volume during Q4 of 2016 due to demonetization move has resulted in a massive notional revenue loss of ₹ 22,600 crore to the real estate industry across the country across top eight cities," according to the report. In other words if the Centre had not taken the demonetisation move, the residential segment would not have suffered such a huge revenue loss it said. State governments also have suffered notional loss of ₹1,200 crore on account of loss on stamp duty in the fourth quarter, it said. "The effect of demonetisation on all segments of the real estate sector across all markets has been fairly brutal to say the least," said Shishir Baijal, Chairman & Managing Director, Knight Frank India while unveiling the half yearly report. Anuj Puri, Chairman and Country Head JLL while admitting that the real sector has been impacted severely said: "It is very difficult to quantify the revenue loss, but yes the sector has suffered on sentimental grounds. Demonetisation has a very negative impact on the sector. Sales lowest in 6 yearsKnight Frank said the fourth quarter numbers are a testament to the effect that the demonetization move has had on the real estate market of the country that was barely recovering from its earlier sloth. Sales volume dropped by 44 per cent year-on-year in Q4 of 2016 and new projects fell by a massive 61 per cent year-on-year during the same period,"it said. At 40,940 units, the Q4 2016 sales volume is at its lowest quarterly level since 2010. The average quarterly sales used to be 90,000 units in 2010, it added. The new projects number was much worse at just 24,300 units in Q4 2016, which was not even one-fifth of peak quarterly levels during 2010, according to the report. The fall in sales volume and new projects were so severe during Q4 2016 that, it brought down the entire second half 2016 numbers by 23 per cent and 46 per cent respectively compared to the second half of 2015, according to the report. The second half of 2016 reported sales volume and new projects of 109,160 units and 68,700 units respectively. The same number for second half 2015 were 141,340 units and 126,860 units respectively across India. Knight Frank said all cities in India witnessed a crash including Bengaluru during the fourth quarter of 2016. Mumbai with notional sales revenue loss at ₹9,100 crore bore the maximum brunt while the impact in Chennai was ₹1,100 crore and for Bengaluru it was ₹4, 800 crore. The notional revenue loss witnessed in Hyderabad and NCR Delhi was ₹800 crore and ₹3,700 crore respectively. The impact of demonetization also brought down the overall sales in 2016 by 9 per cent to 244,680 units from 267,960 units in 2015, the report said.
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