Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Politics / Policy/  Economic Survey 2017 says property prices may dip further on note ban impact
BackBack

Economic Survey 2017 says property prices may dip further on note ban impact

The Economic Survey 2017 says the weighted average price of real estate in 8 major cities, which was already on a declining trend fell further after 8 November

The Economic Survey 2017 says that much of the black money accumulated was ultimately used to evade taxes on property sales, while adding that this type of tax evasion would diminish with curbs on unaccounted wealth and financial transactions taking place increasingly through electronic means. Photo: Indranil Bhoumik/MintPremium
The Economic Survey 2017 says that much of the black money accumulated was ultimately used to evade taxes on property sales, while adding that this type of tax evasion would diminish with curbs on unaccounted wealth and financial transactions taking place increasingly through electronic means. Photo: Indranil Bhoumik/Mint

New Delhi: Property prices fell due to cash crunch following demonetisation and could decline further as investing undeclared income in real estate becomes more difficult, says the Economic Survey.

“Demonetisation could have particularly profound impact on the real estate sector," it said in an analysis on the impact of note ban announced on 8 November 2016.

On short-term effect on the sector through December-end, the Economic Survey 2016-17 said that “prices declined, as wealth fell while cash shortages impeded transactions".

Also read: India Economic Survey backs Universal Basic Income, says note ban effect temporary

Talking about the likely longer-term effect, the pre- Budget document tabled in Parliament today said, “prices could fall further as investing undeclared income in real estate becomes more difficult".

It said that tax component could rise, especially if Goods and Services Tax (GST), slated for roll out in July, is imposed on real estate.

Much of the black money accumulated was ultimately used to evade taxes on property sales, the Survey said, adding that this type of tax evasion would diminish with curbs on unaccounted wealth and financial transactions taking place increasingly through electronic means.

Also read: Benami Act: 87 notices issued so far, says income tax department

While too early to assess whether there will be permanent effects, the Survey said, the weighted average price of real estate in eight major cities, which was already on a declining trend fell further after 8 November.

“An equilibrium reduction in real estate prices is desirable as it will lead to affordable housing for the middle class, and facilitate labour mobility across India currently impeded by high and unaffordable rents," it said.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 31 Jan 2017, 04:22 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App