Bangalore Real Estate Trends

Bangalore: Every sqft in Bangalore is set to get a new and pricier tag, with a revision of land guidance values in the offing.

Coming after four years, it is not likely to be a small rise, but a drastic jump, ranging from 20-30% within the city to a mindblowing 100-150% in the suburbs, which were recently added to the metro.

The revision spells an upward swing — investing in land and property will get more expensive, as will stamp duty, registration charges and property tax.

Land in the outskirts — now included in BBMP limits, and where land developers are designing villas and high-end apartments — was considered affordable, but will no longer be so. The preliminary notification on the revised guidance value is expected to be out anytime this week, after formal approval by the central valuation committee of the department of stamps and registration. “On an average, the revision will mean a minimum of 20-30% increase in land values everywhere. But there will be a huge jump in the periphery areas, which have seen a lot of development. In some places, the rates may even double,’’ B Shivappa, inspector-general of registration and commissioner of stamps told TOI.

With this, revenue collection through stamp duty and registration is also expected to exceed Rs 4,500 crore during 2011-2012, as against Rs 3,758.64 crore collected the previous year.

According to government sources, a robust real estate sector has also triggered the need for immediate revision. Property registration had taken a hit between 2007 and 2009 due to the recession, but picked up in 2010-2011. In fact, revenue collection went up by Rs 941 crore in 2010-2011 over the previous year.

WHAT IS GUIDANCE VALUE?

Refers to base land registration value of an area fixed by the department of stamps and registration
Typically, the value is pegged approximately 20-40% below market prices, to allow for escalation during the year
The latest revision will include land that comes under all 42 sub-registrar offices
In 2009, realty rates in some areas, particularly Whitefield, slipped below the guidance value Realty rates begin to rise
Bangalore: Though a revision in land guidance values is yet to take effect, property prices have already started moving up in some areas. According to real estate dealers, many areas in Mahadevpura, RR Nagar and Sarjapur are already seeing an abnormal increase. “What was Rs 200-300 per sqft in Sarjapur area in 2000, is now Rs 4,000 per sqft. Even in 2007, it was only Rs 1,000-1,500 per sqft,’’ said one agent.

Many areas of North Bangalore have also seen an abnormal spike in prices since 2007, when the guidance value revision triggered a 100-400% rise in upmarket areas, though the outskirts were barely developed.

FOR THE RECORD

The revision in 2007 had increased property rates manifold. Residential sites went up by 50%, commercial properties by 60% and industrial estates by 25%. Flats with roofed car parking facilities had to shell out an additional Rs 70,000 while those without roofs paid Rs 50,000. The justification given was the unprecedented growth in IT City and a proportionate increase in land value.

_{Source: TimesofIndia Dt:23-5-2011}