Shimla: Prime Minister Narendra Modi’s abrupt decision to demonetize high currency notes on 8th November, 2016 has left the property markets in a dump as not just sale and purchase has slowed down but the prices have fallen sharply.
Property prices that were seeking a rate of Rs 4000 to Rs 6000 per square feet for quality constructions have fallen to sub Rs 2000/- per square feet rates.
With there being not much cash in high currency notes with buyers, who have been forced to submit all old notes to banks, scope for cash transactions inflating the prices of properties for now has been wiped out.
All purchase payments through cheques and bank transfers, and the prevailing high registration rates for properties has further slowed down the property market.
Shimla had a 2011 census population of 169,578 people and with limited supply of land, demand for new houses had seen the property prices increase year after year.
For those looking to buy a summer house in the hills of Shimla, the supply is further restricted because land laws of the state demand that the buyer obtain a permission from the government, which is taken to the highest authorities before any approval is granted.
However, sceptics hold that the property prices in Shimla are highly inflated because anywhere between 25% to 35% of houses are unoccupied as they have been bought only as property investments.