Bharat Dhawan is the Managing Director at Mazars India and leads the Corporate Finance Practice for Mazars India. Bharat has extensive experience in finance and operations specifically in mergers/ acquisitions/ divestitures, including acquisition integration, financing strategies, business process improvements, profit and strategic planning. Bharat is an alumnus of University College of Wales, Aberystwyth, he is also on the National Leadership Board of Mazars in India. He has been involved in several practice areas of the firm and has more than 20 years of experience. Throughout his professional career, Bharat has been dedicated to the Firm’s legacy in enhancing exceptional client service experiences provided by our people. TYeam RealtyMyths had an insightful conversation with Bharat, here are the excerpts
Impact of demonetization on real estate?
Demonetization of ₹500 and ₹1000 notes and introduction of new ones of the new/ same denomination will hit the root of the black money the hardest i.e. real estate transactions. Cities where cash component is the highest like Tier II and III cities will be the most impacted. The move is expected to create a downward pressure on the prices, making the houses affordable. This would also help the genuine developers get finance from organized sources like banks, reducing their interest costs and improving their financial viability. Home loan rates would also improve, helping the buyers purchase their dream home. The move will rationalize the industry, correcting the prices in the short term thus helping the buyers. In the long run it will wade out the unscrupulous developers and middle men, strengthening the industry.
Do you think the commercial sector will suffer the most?
Commercial sector will be least impacted due to demonetization as most of the transactions in this sector are conducted using cheque and there is very negligible cash component. However, due to lack of quality supply, cities with high commercial activities like Bangalore, Mumbai, Pune etc. may see an upward movement in prices.
How do you find this move of Modi Sarkar?
We think that this move is very audacious and revolutionary that was much needed for the economic development of the country. It will have a very positive impact on the sector, helping it to reach global standards and giving international players bigger comfort to invest in India.
Suggestion to the people on how they should manage their finance? Is it a good time to invest?
We would advise the buyers to be a little cautious and have a wait and watch approach. A good research before making a decision is advised, as we expect many developers to come up with attractive offers and freebees to lure in the customers. While we do not expect the prices to have a considerable negative impact in the primary market, secondary market will face a price correction. A secondary market is when a property is bought from anyone else other than a developer like an individual/ institutional investor, another buyer, bank etc. This property may not necessarily be second hand if bought from an investor. Buyers may consider these sources as well.