Bhubaneswar, Nov. 9: The Modi government's move to push Rs 500 and Rs 1,000 notes out of the market will have a fall-out for the real estate sector in the city eliminating underhand monetary deals for the time being.

City-based real estate developers say that earlier, landowners used to set their rates much higher than the land's benchmark price fixed by the government. While on paper, the sale was shown as taking place on the benchmark price, the extra money was taken from the buyer in cash of which there was no record. "It was, in a way, black money," a realtor said.

"The average benchmark price in the city remains around Rs 10 crore per acre, while the actual transaction was being done at 10 times the benchmark amount. This helped both buyers and sellers evade tax," said a builder, requesting anonymity.

However, the agent said this scenario was likely to change with Rs 500 and Rs 1,000 notes ceasing to be legal tender. "The landowners now won't be able to ask for the extra cash as such transactions are normally made in high denomination currency, mainly of Rs 500 and Rs 1,000. This will become difficult now. Hence people would like to transact land deals only according to the land's benchmark value," said the builder.

On the contrary, Association for Odisha Real Estate Developers' president Umesh Pattnaik said there would not be any impact on real estate industry with the scrapping of high denomination notes.

"Earlier, there were cash transactions, but now everyone has bank accounts for the transaction purpose. So, the scrapping of notes will not really affect the industry. However, the number of registration of properties may go down considerably for some days," said Pattnaik.

Another real estate developer told The Telegraph that the present change might affect the land registration process, but it would not affect buying and selling of apartments or readymade houses. "Unlike land registration, the developers must show the actual transaction details, while selling a house, so the present move won't really affect this part of the industry," said the developer.

Rasulgarh resident Sanjay Baliarsingh said it was an extremely confusing move of the government to scrap these denominations, but it might help in some sectors, including the real estate world. "It is completely true that landowners might not be able to sell land according to their set price, but they will have to do at government price as they have to show the transaction details and won't be able to accept the scrapped denominations," said Baliarsingh.

Experts also believe that demonetisation of the high denomination notes would further affect the industry as major investment of black money is in the real-estate sector. "The ban on higher currency notes is a major move, which will help curb unaccounted cash in the real estate sector. The effects will be far-reaching and immediate," said another real estate developer.