Black money re-enters luxury segment in real estate market
The demonetisation drive was supposed to put an end to the black money in the country, but recent studies by leading research houses regarding the real estate industry signal that after six months since demonetisation, black money is likely to come back into the sector.
The luxury market in the real estate industry which nearly constitutes 5-10% of the total real estate market has witnessed re-entry of black money.
The new currency is now hugely available in the Indian markets. RBI has made sure that a proper amount of new currency is pumped into the markets. The businesses like jewellery, pubs, restaurants, bars, etc., have been accepting cash, and there is no sign of significant improvement in digital payments in the country.
Black money is slowly creeping into the luxury segment in the real estate industry. However, most of the buyers are being cautious, and are reluctant to deploy a huge amount of black money in under-construction properties. After demonetisation, the real estate market ebbed in the first two months of 2017, but the sales started picking up thereafter.