| It’s official. The real estate market has slumped not only in Bangalore, but also in two other major Tier-II cities — Mysore and Belgaum — in the last few months.
So much so that officials of the Stamps and Registration department are keeping their fingers crossed on reaching their annual revenue target. “Property registration has come down by an average 40 per cent in the State due to various reasons. It will definitely affect achieving the revenue target in this regard this year,” IG (Stamps and Registration) H Shashidar told reporters in Bangalore.
The Government has set Rs 4,400 crore as revenue target from stamps and registration for 2007-08. But as of December 2007, the department has collected only about Rs 2,700 crore. This means, the department has to collect Rs 1,700 crore in three months, ending March 2008, to reach the target. According to Mr Shashidar, revenue collection till December 2007 is 30 per cent less than expected. The worst hit are Bangalore, Mysore and Belgaum, where the real estate market had seen a major boom, he added.
Last year’s (2006-07) figures were just the opposite: The department had collected Rs 3,300 crore against the target of Rs 2,300 crore — over 30 per cent more than the target.
Refusing to call it a slump and terming it instead as a correction, Mr Shashidhar said: “The price is now stabilising and it is good in a way.”
“The guidance value has gone down considerably in the last few months and there has been a steep increase in stamp duty. Besides, banks have tightened their procedures to lend loans for properties and there is strict enforcement of rules. In fact, banks are advancing money more for construction than sites. All these and many other reasons have been discouraging factors for property buyers,” Mr Shashidar explained.
As a result, there is a 25 per cent drop in transaction, for big time builders, investors and speculators have stopped buying properties. “I was told that hundreds of flats will remain vacant in Bangalore if the present trend continues,” he said.
According to real estate experts, property prices have remained stagnant for the last one year and there has been no decrease in prices, except for apartments. For, there has been increase in supply of apartments, but there is hardly any buyer. People are not buying as overall registration value has gone up. So, apartment prices have come down, Selva Kumar, an advocate on property matters, explained.
REAL SLUMP
*Property registration down by 40%
*Major slump in Bangalore, Mysore, Belgaum
*Builders register 25% less transaction
*Hundreds of flats to remain vacant in City if trend continues
*Revenue to govt to come down considerably this year
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