The Hindu : Karnataka / Bangalore News : ‘Real estate market down’

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Sunday, Jan 13, 2008
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Karnataka

Karnataka - Bangalore

‘Real estate market down’

Staff Reporter

BANGALORE: If one thought that property rates were shooting through the roof, it is time to correct the perception.

The real estate market was “going through a correction phase,” not only in Bangalore but also in other cities across the State, Inspector-General of Stamps and Registration H. Shashidar said on Friday.

This stabilisation of property rates meant that the Department of Stamps and Registration managed to collect only Rs. 2,700 crore till December 2007, leaving it with an improbable target of collecting about Rs. 1,700 crore by the end of March. Its target for 2007-08 is Rs. 4,400 crore.

In 2006-07, the department collected Rs. 3,300 crore as against the target of Rs. 2,300 crore, 30 per cent more than the target.

Stating this at a press conference, Mr. Shashidar pointed out that “Property registration has come down by 40 per cent in the State and will definitely affect achieving the revenue target in this regard this year.”

He further said that revenue collection was 30 per cent less than expected in December, and the real estate market had taken a beating, especially in Bangalore, Mysore and Belgaum, where property rates were earlier very high.

Various factors such as reduced investments in realty sector, decline in property transactions, strict loan sanctioning measures adopted by banks and fall in property purchases for investment purposes were the reasons.

Building rates

The proposal to hike building rates which was mooted in December will be kept on hold till further review, Mr. Shashidar said.

The department had decided to call for objections from the public again and based on the feedback modifications would be made to the proposal before it was implemented, he said.

Building rates are used to assess the value of buildings and categorised on the basis of construction materials used.

The hike proposed was in the range of 10 to 25 per cent.

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