Deccan Herald : Prices fall below guidance value

[SharanBS]

Bangalore: Just a year ago, Bangalore’s Anjanapura Layout looked like the most happening place for the realtors with at least 20 real estate offices doing businesses there. Now, at least 15 of those real estate offices have either been closed down or are on the verge of closure.

Blame the economic recession. The realty market is bleeding, even as government is set to form three new layouts in Bangalore. The realty prices have crashed like never before as the land prices have either reached too close to the guidance value, fixed by the government or have gone below it.

Construction industry is yet to turn to the three BDA Layouts: Anjanapura Layout, BHCS Layout and BSK-VI Stage, although these were the most favoured destinations of the real estate agents.

Disappointing

In Anjanapura Layout, the realtors were reaping gold and subsequently at least 20 real estate offices came up a year back. The current status is that many offices are closed.

“The current trend is absolutely discouraging. Already many real estate offices are closed and if the slump continues, I too will have to close my shop and search for some other job,” said C Raju, who has his office, Vishwapriya Realtors, in 3rd Block, Anjanapura BDA Layout near 80 feet road.

Raju said the guidance value set by the government for registration of property in Anjanapura Layout is around Rs 750 per square foot and the existing land prices are too close to the guidance value.

“The last I sold land here was around six months back. Now people are negotiating too much and asking me to sell land below the guidance value.” said Raju.

Manju, another realtor too has a similar say. They said in the next six months the picture will be very grim when the land prices may come down drastically.

No panic selling

Mahadev Sampath of Vishwas Real Estate Agency, with an office at BHCS Layout in Uttarahalli says, the slowdown in economy has hit the realty market very hard. “There is no panic selling but prices have come down drastically. I had sold land here at Rs 2,000 to Rs 2,200 per square foot but now it has come down between Rs 1,500 to Rs 2,000. In some places it is hovering around the guidance value of around Rs 900 per square foot,” said Mahadev.

He also does business in BSK-VI stage where too the land prices have gone down drastically. The picture is not too different at the Visveshwaraya Layout.

The crash in realty market is quite evident at the sub-registrar’s office near Banashankari Junction.

“Just six months ago we were doing at least thirty registrations but now it is somewhere between 10 to 15,” said Shashikala, the sub-registrar at Banashankari office.

Sellers desparate

In Magadi Road, prices have come down below the government value.

"We have noticed land values coming down from the market price of Rs 450 set by the government to nearly 375 per square foot," said Jagdeesh, a real estate agent.

Areas surrounding Hesaraghatta Road have also seen such desperate sellers. Jagdeesh attributes this to the hike in the land registration fee in 2006-07 by the government.

"The situation today has worsened on account of this. With no money, developers and land owners are desperate to get rid of the burdens," Jagdeesh lamented.

It’s reality

· Recession hits realty market hard.

· Land prices in new BDA layouts close to govt rates

· At Anjanapura many real estate offices closed

· Realtors fear further slump in the realty market

· Compared with last year stamp revenue to decrease 20 per cent

Revenue loss

Stamp and registration fees

The recession has slowed down the revenue from stamp and registration fees.

“Last year, we had revenue of around Rs 3,600 crore. Till February, we have earned around Rs 3,000 crore revenue. The revenue is likely to be 20 per cent less than last year,” said K R Niranjan, the Inspector General of Registration and Stamp, Karnataka.

He said, only 10 lakh people have registered their land in 2008-09 as opposed to 14 lakh people last year. He also felt nearly 70 per cent of the people who bought lands have been from Bangalore Urban district.

The government will be bringing down the stamp duty rates from April by almost 1.8 per cent to entice people into registering their land.

Source: Deccan Herald