Connect with us

Guest Column

Demonetization effect: Easing of land prices to boost affordable housing

Anuj Puri

Fringe areas around metros and tier-II, III cities to see land prices plummet in the coming years

 Anuj Puri, Chairman & Country Head, JLL India

Post-demonetization, the affordable housing segment will get a much-needed boost. Confined to the fringe areas of metros, this segment is expected to get a boost as land prices will plummet in the next few years, especially in far-flung areas around Indian metros, and the tier-II, III cities. Most agricultural land transactions involved a cash component, which got affected after PM Modi’s announcement on the evening of November 8.

INR 500 and INR 1000 notes ceased to exist as legal tender from November 9. Land dealings involving a cash component, therefore, will no longer be carried out in the old ways. Those dealing in cash will be unable to pay in the old currency notes and those with undeclared sources of income would fear paying entirely in white as that will carry a risk of attracting the I-T department’s scrutiny.

While the areas within metropolitan limits will be saved from land devaluation due to their high-demand and low-supply scenario, their poorer cousins – the fringe areas – will see an impact after a year or so. As land prices ease in these areas, ticket sizes of apartments are also expected to come down. This should help bring house prices closer to the affordability of many salaried home buyers and spur real estate demand – this time, driven largely by end users and not speculative investors.


Housing in certain precincts to become more affordable than other

  • There is a high possibility of prices softening in sub-markets or precincts located away from the city centres and which have seen a lot of housing supply in recent years. For example, in Mumbai metropolitan region, precincts such as Vasai-Virar, Palghar, Kalyan-Dombivli, Shilphata and upcoming locations around Panvel have a lot of supply.
  • Tier-II and III cities, especially those driven by business communities, such as Jaipur, Surat, Indore, etc., will see higher impact of demonetization and easing in land prices in the medium-to-long term. Certain projects in Kolkata’s northern sub-market may witness price reduction in the next three-four quarters. Vacant land in the north of Kolkata, along BT Road (outside its municipal limits), would see easing of prices in the next one year.
  • In Hyderabad, precincts like Uppal, LB Nagar, Shamirpet in the eastern sub-market has more plotted developments and row houses than residential apartments. Therefore, the cash component in transactions is also relatively higher, and due to consistent delays in the metro project, there is a possibility of price correction here.

Other cities also have fringe areas where prices will ease. However, such locations will need to be observed over the next six-twelve months to understand by when, and what margin, the prices there will soften and local demand-supply dynamics could bring about a change in some of these areas.

Latest News

News1 day ago

Central Park’s Bignonia Towers in Sohna Achieves Rs 500cr Sales Bookings 

New Delhi, 14th June 2024: Bignonia Towers by Central Park in in Sohna has recorded sales bookings of Rs 500...

News1 day ago

Author Ashwinder R. Singh Launches His Third Book, “Master Commercial Real Estate”

June 14, 2024: Ashwinder R. Singh, acclaimed for his insightful contributions to real estate, launched his third book, “Master Commercial...

News1 day ago

Grade A Office Spaces Demand Growing at a Brisk pace, 164.3 Mn Sq Ft Added Since 2021

June 14, 2024: India’s office market is undergoing a profound transformation, reflecting the country’s robust economic growth, demographic advantages, and...

News1 day ago

Real Estate Sector Needs to Gear Up for New Housing Challenges Until 2029, With Rain Harvesting as a Core Element for Housing Projects: HUA Additional Secretary

New Delhi, June 14, 2024: Additional Secretary of the Ministry of Housing and Urban Affairs, D Thara, on Friday asked...

News2 days ago

Tier-2 Cities Closing the Gap with Top-8 as Property Prices Surge by 10-15% in Prime Areas: Report

New Delhi, June 13, 2024: has released its inaugural “The Bharat in India” report on Thursday. The report unveils...

News2 days ago

Housing Prices Soar 13% CAGR as Inflation Moderates to 5.4%: ANAROCK Report 

Mumbai, June 13, 2024: Inflation, the gradual increase in the general prices of goods and services, erodes the purchasing power of money...