The government's move to ban Rs 500 and Rs 1,000 notes is expected to have an impact on key sectors like real estate, housing finance and banks.
According to a Citigroup report, the key sectors that could be impacted because of this move are real estate (likely near-term negative demand impact), housing finance companies (likely near-term negative impact) and banks (positive for deposit growth, but could result in negative impact on margins, given the slow loan growth).
As per various estimates, the size of the parallel economy in India is estimated at more than 20% of the GDP and the stock of existing Rs 500/Rs 1,000 notes accounts for over 85% of the total currency in circulation.
Certain sectors
According to the report of the global financial services major, the potential impact of the government's move on certain sectors like real estate, housing finance, banks, fintech/payment space and consumer discretionary space is expected to fuel volatility in the markets.
Speaking to DH, Shriram Properties Managing Director M Murali, said, "Unorganised trade and services and less-organised sectors with high cash economy will face immediate impact.
"In the long-term, as said, this revolutionary step will bring in several benefits, with larger amount of money flowing into the mainstream economy."
"As with real estate, the less-organised segment will only be affected. Today, most of the reputed developers have good practices already in place and everything is accounted. The organised real estate sector welcomes the step as it will further improve the sector's position on transparency and corruption in global minds, thus enabling further capital flow," Murali said.
Market trend
"As for the market trend, it may have some transitory impact, expecting fall in prices, which of course is already bottomed out because of high input costs. Fence-sitters may defer their decision for the time-being, but will understand the reality and come back soon. However, with this check on black money, we can expect fall in land prices and increased bona fide demand for housing," Murali said.
'No cash payments'
Habitat Ventures co-founder and director Shivaram Kumar Malakala said, "Bengaluru will be the least affected market on a pan-India basis, since the market is driven by the end-user. The role of cash is limited. Professional developers like ourselves, who also have institutional investor partners on board, are better off, since we do not accept cash payments."
According to Brigade Group CEO(residential) OmAhuja, "In the long-term, the economy will considerably benefit and help in creating a level-playing field for clean and ethical players, fostering transparency in the sector."
The government’s move to ban Rs 500 and Rs 1,000 notes is expected to have an impact on key sectors like real estate, housing finance and banks.
According to a Citigroup report, the key sectors that could be impacted because of this move are real estate (likely near-term negative demand impact), housing finance companies (likely near-term negative impact) and banks (positive for deposit growth, but could result in negative impact on margins, given the slow loan growth).
As per various estimates, the size of the parallel economy in India is estimated at more than 20% of the GDP and the stock of existing Rs 500/Rs 1,000 notes accounts for over 85% of the total currency in circulation.
Certain sectors
According to the report of the global financial services major, the potential impact of the government’s move on certain sectors like real estate, housing finance, banks, fintech/payment space and consumer discretionary space is expected to fuel volatility in the markets.
Speaking to DH, Shriram Properties Managing Director M Murali, said, "Unorganised trade and services and less-organised sectors with high cash economy will face immediate impact.
"In the long-term, as said, this revolutionary step will bring in several benefits, with larger amount of money flowing into the mainstream economy.”
"As with real estate, the less-organised segment will only be affected. Today, most of the reputed developers have good practices already in place and everything is accounted. The organised real estate sector welcomes the step as it will further improve the sector’s position on transparency and corruption in global minds, thus enabling further capital flow,” Murali said.
Market trend
"As for the market trend, it may have some transitory impact, expecting fall in prices, which of course is already bottomed out because of high input costs. Fence-sitters may defer their decision for the time-being, but will understand the reality and come back soon. However, with this check on black money, we can expect fall in land prices and increased bona fide demand for housing,” Murali said.
'No cash payments’
Habitat Ventures co-founder and director Shivaram Kumar Malakala said, "Bengaluru will be the least affected market on a pan-India basis, since the market is driven by the end-user. The role of cash is limited. Professional developers like ourselves, who also have institutional investor partners on board, are better off, since we do not accept cash payments.”
According to Brigade Group CEO (residential) Om Ahuja, "In the long-term, the economy will considerably benefit and help in creating a level-playing field for clean and ethical players, fostering transparency in the sector.”