Home › Articles › Ahmedabad › Demonetisation & RERA Impact on India's Resale Property Market

Demonetisation & RERA Impact on India's Resale Property Market

By PropertyGeld Editorial Team

Published on PropertyGeld: 8 Oct 2026

Demonetisation & RERA Impact on India's Resale Property Market

India's secondary or resale property market went through a major transformation after a series of regulatory and economic reforms, particularly demonetisation, RERA and GST.

While these measures initially created uncertainty and slowed property transactions, they also encouraged greater transparency and pushed the market towards more formal, documented transactions. The changes were especially important for the resale segment, where cash-based transactions had historically been more common.

What Is the Secondary Real Estate Market?

The secondary real estate market refers to properties that are being sold by an existing owner rather than directly by a developer.

For example, if a homeowner purchases a flat from a builder and later sells that same flat to another buyer, it becomes a resale transaction.

This segment is an important part of India's overall housing market. According to a 2018 Grant Thornton-NAREDCO report, secondary transactions accounted for more than half of real estate transactions in both the NCR and Mumbai Metropolitan Region during 2017-18.

Impact of Demonetisation on Resale Properties

The November 2016 demonetisation exercise initially had a strong negative impact on resale property transactions.

A major reason was the historical use of cash in secondary-market transactions. With high-value currency notes withdrawn from circulation, buyers and sellers who depended on cash payments were forced to reconsider or postpone deals.

Industry reports from that period indicated that resale transactions slowed sharply immediately after demonetisation.

However, the longer-term effect was different.

As cash-heavy transactions became more difficult, the market gradually moved towards greater use of banking channels and declared payments.

Prices Became More Realistic

One of the effects of demonetisation was pressure on property investors who wanted to exit their holdings.

In several NCR markets, sellers reportedly became more willing to negotiate prices. Historical industry estimates suggested that resale properties in some projects were available at around 5-10% below primary-market prices.

This created an opportunity for genuine end-users.

Instead of competing with investors who expected large speculative gains, homebuyers could negotiate directly with owners who were more interested in selling their properties.

Greater Transparency in Property Transactions

Demonetisation also reduced the scope for cash-heavy property deals.

Before the reforms, some secondary transactions involved substantial cash components. The government's objective was to reduce the use of unaccounted money in the economy, including real estate transactions.

Over time, greater reliance on formal payment channels improved transaction transparency.

This did not eliminate every problem in the resale market, but it changed buyer and seller behaviour.

RERA Added More Confidence to the Property Market

The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, introduced a stronger regulatory framework for the real estate sector.

Although RERA primarily focuses on developer-led projects, its broader impact also influenced buyer confidence in the property market.

The implementation of RERA encouraged developers to register projects, disclose information and comply with regulatory requirements. It also increased awareness among buyers regarding project approvals, possession timelines and developer accountability.

For the secondary market, this created an indirect benefit because buyers became more conscious of documentation and regulatory status before purchasing property.

GST Increased the Attraction of Ready-to-Move Homes

The introduction of GST in July 2017 also affected property-buying decisions.

At the time, ready-to-move-in properties with the required completion certificate were outside the GST applicable to under-construction residential property. This made ready homes comparatively attractive to buyers.

For many homebuyers, a ready property offered two major advantages:

They could physically inspect the finished home.
They could avoid the uncertainty associated with construction delays.

As a result, demand for completed and nearly completed homes increased.

Why Buyers Started Preferring Resale Properties

The preference for resale homes was not only related to price.

Many buyers wanted certainty after experiencing or hearing about prolonged construction delays in under-construction projects.

A resale property allowed buyers to inspect:

Actual construction quality
Location of the apartment
View and ventilation
Society maintenance
Parking arrangements
Existing neighbourhood infrastructure
Water and electricity supply
Nearby schools, hospitals and markets

This "what you see is what you buy" advantage became increasingly important for end-users.

NCR Became an Important Resale Market

Delhi-NCR was one of the regions where the change was particularly visible.

Markets such as Gurugram, Noida, Greater Noida and Ghaziabad had large inventories of investor-owned residential properties.

As investors became more willing to sell, buyers gained access to more resale options.

In some locations, resale properties were priced more competitively than comparable new properties, giving end-users additional negotiating power.

Resale vs New Property: What Changed?

The reforms gradually reduced some of the differences between the primary and secondary markets.

Factor	Resale Property	New/Under-Construction Property
Physical inspection	Usually possible	Limited before completion
Possession uncertainty	Generally lower	Can be higher
Construction risk	Low for completed homes	Depends on project status
Price negotiation	Often possible with individual sellers	Depends on developer
Documentation	Requires careful verification	Developer documentation available
GST consideration	Depends on property status	Applicable rules vary by transaction stage
Rental income	Can begin quickly after purchase	May require waiting for possession

The comparison depends on the specific property, its completion status and applicable tax rules.

Secondary Market Still Had Challenges

Despite becoming more transparent, the resale market continued to face several issues.

A 2018 industry report highlighted problems including inconsistent documentation, lack of standardised processes and property-related litigation.

Therefore, buyers still need to conduct proper due diligence.

Important checks include:

Verify the seller's ownership.
Check the original sale deed.
Verify property tax payments.
Check society maintenance dues.
Confirm there is no outstanding home loan or mortgage.
Obtain an encumbrance or relevant legal verification where applicable.
Verify building and completion documents.
Check whether the property is involved in any dispute.
Confirm the actual carpet area and other property details.
Complete the transaction through documented banking channels.

How Policy Reforms Changed Investor Behaviour

The combination of demonetisation, RERA and GST changed the behaviour of both investors and end-users.

Investors became less comfortable with speculative transactions involving large cash components. At the same time, genuine homebuyers increasingly looked for properties that offered transparency, clear documentation and immediate usability.

This helped shift some demand towards completed and resale properties.

Long-Term Impact on India's Resale Market

The long-term significance of these reforms was not simply about reducing property prices.

The bigger change was the gradual movement towards a more formal and transparent real estate ecosystem.

Government initiatives such as demonetisation, RERA and affordable-housing policies were part of a broader effort to bring greater regulation and transparency to the property sector.

For the secondary market, this created opportunities for genuine buyers while making it harder for transactions based primarily on unaccounted cash.

Conclusion

Demonetisation initially disrupted India's resale property market, but the subsequent transition towards formal payments, combined with RERA and GST, contributed to changes in buyer preferences.

Ready-to-move and resale homes became more attractive because buyers could inspect completed properties, avoid some construction-related risks and negotiate with existing owners.

The reforms did not solve every problem in India's secondary real estate market, but they contributed to a gradual shift towards greater transparency, documented transactions and more informed homebuyers.

Explore

Properties in Ahmedabad