Spiralling cost of properties, high inflation rate, worrisome slump in the economy owing to recession are some of the main reasons for fall in revenue collections in the national Capital. This has resulted in buyers, especially from middle class, preferring NCR regions. The middle class are facing the dilemma of survival in Delhi and are making a beeline to own property in the peripheral areas.
The purchase of property by Delhi’s urban middle class has faced steep decline during past one year leading to severe crunch in revenue generation by Delhi Government’s Revenue Department. This has impacted the revenue collection straightaway. The decline so far has been assessed at 20 per cent to 30 per cent in the current financial year. The Revenue Department had collected revenue up to Rs 2,348 crore between April 2013 and January 2014. The department had collected Rs 2,579.23 crore between April 2012 and January 2013.
Officials say that they had expected that revenue would be increased after regularisation of 895 unauthorised colonies in Delhi from September 2013. “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,” said 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. “Smaller builders are starting to feel the pressure and are willing to negotiate,” he added.
Properties rate in Delhi had started climbing a few years ago after the Government allowed house owners to build a third floor. While this led to a steady increase in inventory, the growth in demand petered out, especially in the last six to eight months, because of weak economic sentiment and high interest rates. Ramesh Sharma, a South Delhi-based real estate agent, said his business is down by at least 50 per cent in the last six months. While builders agree that transactions in South Delhi have come down, they maintain that property prices have not softened.