Registration of flats, which is expected to see a negative growth in Karnataka this financial year, may see an uptick next year, feel real estate firms and registration authorities.
An analysis of the six-year data on the registration of flats in the state — most of which are located in Bengaluru — shows that while the sales have not seen a major hit, the slump in growth rate is the cause of concern.
The number of flats sold during 2014-15 was 54,585 while in the current financial year it is 57,815 units as of February. Although the registration figure will vary by the end of March, it is unlikely to cross the number of units registered last financial year which was 63,003 units.
This is the second time in the past six years that the real estate sector in Karnataka is recording a flat or negative growth. The last time the state saw negative growth was in 2016-17, the year of demonetisation, when the number of flats sold was 6,000 units fewer than the previous year.
“There was a dip in sales in the last quarter (Oct-Dec 2019). But I have been told in my recent interaction with the real estate sector that the land conversion rate has increased and the market is likely to pick up pace in the next financial year. We will get a clear picture in a month’s time,” said KV Thrilok Chandra, Inspector General of Registration and Commissioner of Stamps.
The Stamps and Registration department, a major provider of revenue to the state government, saw a drop in revenue in the first three quarters. The government had set a target of ?11,828 crore for the fiscal year 2019-20, the department has been able to achieve ?10,400 crore at the end of February.
The department officials are now waiting to see if the government will revise the guidance value in the coming budget, which, if it happens, they believe will help boost revenue.
Real estate body Credai Bengaluru chairman Suresh Hari said while there are all indications of the sector’s recovery, the impact of coronavirus on the financial situation is delaying it.