Despite the state earning a much higher income from property registrations in the first quarter of the current financial year, compared to the corresponding period last year, a closer look shows the number of transactions dipped during the period. There was an overall fall of 19.88% in the number of documents registered in the state during the first quarter.
Coimbatore region recorded the steepest fall of 29.47%, while Chennai region comprising Chennai north, central, south, Chengalpet and Kancheepuram registered a 9.2% dip. Industry sources said the huge increase in guideline values, which came into effect on April 1, is wreaking havoc in the realty sector. The last time the sub-registrar offices in the state saw a huge rush was in the second half of March, when many people rushed to get their properties registered before the revised guideline values came into effect. The registration department capitalized on the rush and earned 500 crore in a few days.
Among the tier-two cities, Madurai recorded a 23.6% fall in property registrations. “It is due to the huge increase in guideline values of properties, which is proving to be an impediment. Though the market value of certain areas is relatively low, the new guideline values are making it near impossible to buy properties. The industry is witnessing a disturbing trend,” said T Chitty Babu, secretary, Confederation of Real Estate Developers‘ Association of India (CREDAI).
The representations given by CREDAI to the government to rationalize guideline values in many areas did not yield results, Babu said. In the first quarter ending June this year, about 6.3 lakh registrations of properties were done across the state, while it was 7.9 lakh in the corresponding period last year.
After the state released the draft guideline values in October last, the sub-registrar offices across the state witnessed a steady growth in registration revenue as people wanted to avoid paying more stamp duty and registration charges later on.
“But that stopped abruptly in April. Chennai, Madurai and Coimbatore regions managed to register only 2.9 lakh deals in the first quarter this year,” a senior government official said. The sub-registrar offices in Chennai registered only 1.08 lakh documents, as against 1.19 lakh documents in the corresponding period last year.
“Most of the property deals that took place recently were driven by the NRI market,” said CREDAI national governing council member N Nandakumar.
Source:TIMES OF INDIA