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After so many days and review of all things, it is sure that current move of Govt to remove 500/1000 notes from market is going to impact every business and every citizen of India. As initially wrote that this will have immediate negative impact on Real Estate Business in short term but there are few positive impact also and it will not impact each and every market of real estate. Some market will have very bad impact and some areas will have less impact. Few observations:

• Wherever circle rates (rates on which govt does registry of property) are less than market rates, market will see correction in rates. The more difference in circle rates and market rates, more correction in rates will happen. For example, in few areas of Delhi, circle rates are 40% of market rates so correction will be more and it will take years to fill this gap.

• Wherever circle rates are near to market rate or difference is not high, there will be less impact (for example , central Noida circle rates are approx. 70-80% of market rates) so it will have less impact and slowly slowly volume of sales will be equal to past in short to medium term. Infarct with builders making little bit correction of rates in these areas, can push more and more sales and volume can go up.

• Wherever circle rates are almost equal to market rates (like Noida Ext, NH-24 properties, NH-58 etc.) will see no impact and even with home loan rates coming down, can see very good jump in sales and volumes can go up even in short team to medium term.

Impact on rate of Interest(www.findmyproperty.com) : In last 6 days, banks are having 6 Lakh Cr more money in banks. As RBI always controls that how much % of total money any banks should have so they cannot keep whole money with them so eventually this money will come in shape of loans to customers/companies (home loan, car loan, personal loan, business loan etc.).So all interest rates will come down and already indication has started coming as banks are reducing FD rates which is always indication that after this interest rates will start coming down. We should expect that rates will be down approx 1-3% in near future. It will not happen immediately but in short to medium term, it will be.

Now see how much difference it can make in real estate, with every 1% change in interest rates, EMI will approx. 7-8% less. Take this example:
On 20 Lakh loan for 20 years:
• EMI on 9.5% : 18,643/month
• EMI on 8.5%: Rs 17,356 /month
• EMI on 7.5% : Rs 16,112 /month

So approx 2 % down in interest rates will be giving approx 10-12% saving on EMI or in other words increasing loan eligibility of the same so the people who

were having loan eligibility of 20 Lakh , now will have loan eligibility of 22-23 Lakh with same EMI amount. This will increase supply and market will go up

Positive Impact: (www.findmyproperty.com)

1. Fake currency note (Rs 500/1000) will go completely from the market and it will be huge positive for currency
2. There was dead money of approx 5 Lakh crore which was not in use and it was either in lockers or home so was impacting economy a lot, now this whole money will come in system and lot of money will be used to rotate the Economy
3. In last3 days, 1.5 Lakh crore money deposited in bank account which is more than new bank deposits of last 6 months average.
4. In pune, govt collected approx 38 cr tax(property , water etc.) which were pending from last 5-7 years as they accepting old notes. This is just one city of India, amazing how much tax money pending in whole India. This money will come to Govt and where it will be , only development of India
5. In NCR approx 100 crore sales booked in last 3 days by traders whose whole last year turnover was approx 20 crore
6. Dead “Jan Dhan” accounts saw deposited of approx 140 crore in last 3 days

Positive Impact Businesses:

1. Businesses like IT companies, insurance industry, BPO etc. Will not have any impact as they don’t deal in cash
2. Almost all Export Units will have no impact at all as they always do transaction by RBI route

Negative Impact (www.findmyproperty.com)

1. For short term, there will be cash crunch of new currency so people have to control their expenses
2. We are facing this problem, as use of Debit Card/Credit Card is very less in India and we use 80% time(specially cities other than Metros) cash to do transaction.
3. Upper middle class or middle class in metro cities will not see this crunch as they are used to having credit card/debit card for all transactions
4. Few business which were totally depend on cash will have more impact like jewellery but in this also branded jewellery like Tanishaq will have less impact or might be can see more sales as people will now move to branded Jewellery when they are paying in white money

Middle traders (like Kiryana store in small cities or small small business in all cities) will have impact as their undisclosed(not black) will be reduced so life style and saving will reduced.