Friday, June 6, 2008

Slowdown in Chennai property transactions

A. Srivathsan

CHENNAI: The number of property transactions in Chennai and its immediate neighbouring districts has come down by 10 to 15 per cent in 2007-08.

In 2006-07, the three zones within the city registered about 3.7 lakh documents and netted about Rs.1,384 crore in terms of registration charges and stamp duty. Of these transactions, about 80 per cent was property related. The second half of 2007-08 witnessed a slowdown. Without exception, transactions in all the three zones of city – North, South and Central and the neighbouring Kancheepuram and Chengalpattu districts have come down. South Chennai was the worst hit, a drop exceeding 15 per cent. Chengalpattu followed this with more than 10 per cent. In 2006, these two districts along with Kancheepuram registered high growth in property transactions across the State.

Prakash Challa, President, Confederation of Real Estate Developer’s Associations of India (CREDAI), Tamil Nadu confirms that the property transaction and sale of apartments have come down in the recent times. He attributes the high interest rate, rise in the construction cost and additional charges as reasons. The steep rise in land prices and reduced funding for real estate projects have added to the situation, he said.

In spite of the fall in transaction, the revenue generated for the Government in terms of stamp duty has not come down. An upward revision in guideline values, between 50 and 150 per cent, which have been in force since August 1 last year, helped improve revenue collection.



Realty Rider said...

Property prices in Chennai in the last two years have shot up by almost 200 percent but currently, the situation seems gloomy. In fact, some realty players have sold only a couple of houses in the last six months. According to experts, there has been a 90 percent drop in demand for residential projects since the start of the year. Office rentals are also seeing a correction. The Central Business District in Chennai has seen a 15 percent drop. Most real estate developers in Chennai say they are struggling to sell flats, with one real estate player admitting he has sold just one flat in the last six months. Analysts say that this is the time for developers to sit back and take a realistic look at prices.For more view-

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