Capital’s housing bubble ready to pop
Some of the main reasons for fall in revenue collections in the National Capital are Spiraling cost of properties, high inflation rate, and worrisome slump in the economy owing to recession. This has resulted in buyers, especially from middle class, preferring NCR regions. The middle class are making a beeline to own property in the peripheral areas and are facing the dilemma of survival in Delhi.
The acquisition of property by Delhi’s urban middle class has faced vertical decline during past one year which has led to severe chomp in revenue generation by Delhi Government’s Revenue Department which in turn has impacted the revenue compilation straightway. The drop down has been assessed at 20% to 30% in the current financial year. The revenue of up to Rs 2,348 crore has been collected between Aril 2013 and January 2014 by the Revenue Department. A collection of Rs 2,579.23 crore has been done by the department between April 2012 and January 2013.
Legalising illegal colonies may help increase revenues
The revenue is expected to increase after regularisation of 895 unauthorised colonies in Delhi from September 2013 as per the officials. “It is ironical that collection of stamp duty drastically reduced since September 2013 as the sub-registrars have reportedly refused to register the transaction of property due to ambiguity in guidelines,” stated by officials.
“There has been a steady decline in prices over the past few months, with buyers shying away from what looks like an overpriced market,” said a real estate broker in Greater Kailash. In addition to it he said “Smaller builders are starting to feel the pressure and are willing to negotiate,”
Price of properties has seen steep rise in Delhi few years ago after the government authorised house owners to build a third floor. This has led to the smooth rise in inventory, the growth in demand fizzled out, in last 6-8 months, because the weak economic response and high interest rates. A South Delhi-based real estate agent Ramesh Sharma stated that his business is dropped by 50% in last 6 months. Some builders on the other hand concur that transactions in South Delhi have dropped; they maintain that property prices have not softened.
Source: The Pioneer
Delhi, Delhi Government’s Revenue Department, Greater Kailash, National capital, NCR regions, Ramesh Sharma
