Anytime is a good time for investment in RE so long you are satisfied with the price....

Assuming 3 trillion cash out of the system. Below are some of the things i am watching, how it would play out in following months

1. Informal sector business requirement of cash
2. Life style needs for the privileged
3. Wealth Safety - Portfolio shuffling


P.S:Already 8.4 trillion deposited to banks, another month left. I wouldn't be surprised to see remaining 5.6 deposited to banks.

My personal advise is wait for some more month.

This is the best time for buying properties in the city vicinity and for those who missed already. A rare chance!

Could you add info to support your claim? Any price reduction happening that you are aware of? Do you think price will increase from now, if so why? Are you a builder or plot developer/promoter or mediator by profession?

Sir, I am a lay man, my opinion based on what I hear from people. Just a sample, Ponmar area is good for investments and now you can get good plots, good location, for better price.

True

Can we really expect tweaking in Personal income tax or Stamp duty rates post Dec 30? There are some requests already to reduce the stamp duty to prevent evasion/under reporting. Also real estate demand is partially driven by IT exemptions on home loan to save tax. My guess is tweak in any of these two params will affect RE.

Thanks sir.

Before making the deal, pls observe the market for 3 months and decide, though this not entirely unknown territory. Critics say only 10-20% of black assets are held as cash, Real estate and gold has been number 1 and 2. Also chennai has lot of NRI white money flow. Per this data, the impact may not be huge.

NRIs have been nursing their wounds since 2010 - USD was Rs45 then and has been on a steady and relentless rise. Except few primary market deals or commercial RE, good portion of money needs to be withdrawn as cash to do secondary market deals. Not a comfy position for them. 30-50% currency loss in the last 5-6 years and not-so-rosy and tepid returns of the current new normal, has taken the zing out of any interest they have. NRIs have many alternatives for the 'new normal' best case returns of 8-12% keeping the repatriation ability and account clean and everything through electronic means. They don't need RE. With so much uncertainty and diluting the sanctity of all-accounted funds, RE has to throw more rewards to excite them. Earlier 15-18% returns made them do lot of funny things like withdrawing cash from accounts to fund cash deals because returns blind sided them. Now, they are a much aware and reformed lot if they have taken the learning seriously.

I would wait till the new dynamics are achieved. In Chennai the volumes were low after the revision of guideline values. Another point is the revision of guideline values did reduce the impact of black money to some extent.

You have covered the investor side. It does not make sense as rupee keep depreciating. Most cases you cannot take your principal considering stagnation of properties in rupee terms and rupee depreciating against $

I am talking about the individuals who work middle east, Europe, US, Singapore etc and keep their families in Chennai. They look out for the avenues for early retirement. This money is significant for Chennai.

due to these reasons I am little leaning towards Chennai holding or moderate correction to it prices.

Agreed. Many of the resale properties (apartments) and houses in the city and city brim still has a good portion in cash. % wise, it may be lower. But, quantum wise, it is too large in terms for how clean accounted money can handle that today or in the next few months.

For instance, 1C resale apartment with 20L cash is so common because you pay GV for UDS and depreciated value for construction in cheque. Rest is still handled in cash. How do you think a clean NRI investor who has no access to cash or a local investor who is keen to buy, but has only clean money. How can they generate 20L in cash? Above is not an issue in primary deals and the builder handles it even if you give a cheque.

Point is well taken. if you ask how many in the salaried class have 20 L in cash. May be <1%

Just withdraw 20 L cash from your NRI account and give, I had to do the same when i bought my property in Mumbai.