The overall economic slowdown appears to be catching up with the State economy, if one were to go by the trend of registration of documents, invariably land deeds, and the consequent collection of revenue over the last five months.
Compared to the corresponding period (April-August) of the previous year, there was a dip of around 2%, both in terms of the number of documents registered and revenue collections.
Though the prevailing “mood of doom and gloom” is said to have been the main factor, a look at the pattern of the activity reveals that the last five months had alternated between negative and positive growth rates. A senior official of the Registration Department says it is too early to zero in on any specific reason, and the department is studying the situation.
Supplementing his colleague’s position, another official points out that during 2017-18 and 2018-19, both the documents registered and the revenue generated saw positive growth rates of 9.01% and 16.42%, respectively, after five successive years of negative growth rate.
A senior executive of a private home financing company says “systemic issues” are a major cause of the current situation. Other than Chennai Metro Rail, the State has not seen the execution of any big-ticket infrastructure project in recent years. Besides, the State, for the time being, seems to be experiencing a stagnation in registration of high-value properties.
A “lasting revival” of the real estate sector hinges on the generation of greater employment opportunities through infrastructure projects.
S. Ramaprabhu, chairman, Southern Centre of the Builders’ Association of India, says the real estate sector will acquire greater momentum if the Centre brings under the scheme of ‘affordable housing’ projects aimed at constructing houses costing up to ₹75 lakh each.
This will cover at least 50% of the housing projects that are under way in the State.
“For the next two years or so, the interest rate can be lowered to 6.5%, as is being done for projects under the Pradhan Mantri Awas Yojana,” he says, adding that the Union government could consider providing income tax relief in respect of the purchase of a third home.