Rahul Kumar has just sold his house in Noida in a typical 60 per cent white and 40 per cent black deal prevalent in the market. However, sellers like Kumar are tensed due to the banning of Rs 1,000 and Rs 500 notes, typically used in such deals.

The government’s decision to demonetise Rs 500 and Rs 1,000 notes will have an adverse impact on smaller and unorganised players, besides impacting the resale property market.

Industry players said housing prices could witness downward pressure.

“It is a fantastic move and quite a radical one. For the real estate sector, we believe it will wipe out murky transactions,” Niranjan Hiranandani, CMD, Hiranandani Developers said.

According to market estimates, 10-50 per cent of the value of the property being bought or sold takes place in cash in India.

“This is a transformational reform by the Modi government. Real estate transactions in progress and not completed that involve cash will be impacted, leading to complications. This will certainly lead to pain in the realty sector in the short term, but it is a welcome move for the long run,” said Ravi Ahuja, Executive Director, Office Services & Investment Sales at Colliers International.

"Effectively, the primary market will not be disturbed as the inventory was sold to end users who avail of home loans. Moreover, the organised part of the RE industry has always been compliant and it is only the unorganised fly-by-night players who will be affected. This move will help industry to fight more effectively for removal of section 43CA of the IT Act as now there is no reason to charge tax on so-called deemed income to both the buyer and seller following this move,” Getamber Anand, President - CREDAI National

Anuj Puri, JLL said, “Stricter measures against black money have for long been required to help bring about greater transparency, to give the Indian real estate sector more credibility and make it more attractive for foreign investors. Black money deals are more common in the unorganised market, but this practice has, in fact, been on the decrease with greater awareness on the part of buyers. Before too long, the caricatured version of black money driving Indian real estate is no longer applicable.”