Guidance value to be revised=>news article. Any impact?

[plotcrazy]

Here is the link w.r.t subject matter
http://bangalorebuzz.blogspot.com/2010/ ... vised.html
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Guidance value to be revised

Guidance value to be revised

Staff Reporter
In some pockets of Bangalore, the guidance value is more than the market value

Real-estate industry has been demanding downward revision

BANGALORE: The much-awaited revision of guidance value of properties in Bangalore will take place shortly. To plug certain existing loopholes, the Government will revise the guidance value of properties both in Bangalore Urban and in Bangalore Rural areas before the end of this calendar year.

The last revision of the guidance value was in 2007 and technically the value has to be revised annually, the Inspector-General of Registration and Commissioner of Stamps S.N. Jayaram told presspersons here on Friday.

Similarly such revision would take place in other areas also and the value had been revised in 18 districts already, he added.

While the guidance value for properties in Bangalore went up by 200 to 300 per cent during the last revision, there had been a demand by the recession-hit real-estate industry for a downward revision to boost the demand.

Boom period value

“It was all right to have the present value during the boom period. Some corrections have to be made in these values now,” he said and added that the revision could either be an increase or decrease in the guidance value depending on their locations. For example, in some areas the values have already saturated while in other areas guidance value was higher than the market value. These anomalies have to be corrected,” Mr. Jayaram said.

Pointing out that pockets in Kanakapura and Doddaballapura, near Bangalore, guidance value was higher than the market value.

“The revenue collection target for this year pegged at Rs. 3,500 crore could still be reached with the revision.”

Recession effect

Meanwhile, he said that there were indications that the economic downturn was over and that the property registration figures for April had been encouraging. “As against the collection of Rs. 166 crore as stamp duty in April 2009, the department has collected Rs. 271 crore in April 2010,” he said and added that the was expecting the momentum to go up in a big way.

The increased revenue, he said, was due to the Telangana crisis which had driven investments to Bangalore from Hyderabad.
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[msn1270]

Lets wait and see the revised guidance value. Then only we can analyse its impact.

Already china is tightening the real estate domain by taking rigorous steps to avoid the expected Real Estate Bubble, which may bankrupt so many big financial institutions. Already uncertainty is there in the global market due to European financial crisis. After Greece, Spain, Portugal, Ireland, italy are in pipeline, which may force the global economy to double dip recession, which will be much more serious than 2008 US Recession. Euro value is moving southwards against other currencies and lot of indian IT companies revenue margin is going to hit severely.

Real Estate Sentiments is in poor condition inspite of Builders lobbying by spreading fake news about revival in the market and steadily increasing the prices. Already last week, Nitesh Estates IPO tumbled and listed 20% below its issue price and expected to slide further.

Best policy is wait and watch.

[sreekbda]

In which are is Guidance above actual rates in bangalore?!!

I can't think of any area. Does anyone know?

[rewatcher]

Reducing the guidance value will do more harm to the common folks in my opinion. This action will make it easy for people who has lot of black money (corrupt babus, business people etc) to buy property. Let's say the guidance value in a particular location is Rs.2000 per sqft. If a corrupt babu wants to buy a 60*40 site he has to register it for 48 lakhs and has to show the source of income which is difficult to do. Now if the guidance value is reduced to Rs.1000 per sqft, he could some how manage to show the source. What this will do is, this will bring out a lot of black money out of the closets into the RE market and that 'could' jack up the prices. Since these people earn this money quite easily without any hard work, they don't care paying a few lakhs more. This will hit the people who earn money the hard way and want to have a shelter of their own.
Just my 2 cents...