Millennium Post

Ggn property slowdown affects govt's finances

Piyush OhrieGurugram: The slowdown in property market of Gurugram has affected the state government's finances. There has been a drastic drop in the collections of revenue through registration from the Gurugram circle. Out of Rs 3,900 crore of total revenue collected by the government through registration of properties, Gurugram has contributed about Rs 1,464 crore. This amount is way less than the revenue that was collected in year 2013-14 which was over Rs 1900 crore.
There has also been a marked slowdown in the sale of housing units. As many as 55,220 units were sold in 2013-14 while, the sale transactions lessened down to 52,476 units in 2016-17. The presence of larger inventories however ensured Rs 26,073 crore, higher than what was collected in 2013-14 which was around Rs19, 500 crore.
The Gurugram property market has been witnessing the drop in valuation since 2013. Recent steps taken by the government in form of demonetisation and GST have also adversely affected the property market on short term basis. According to the data, fall in valuations have resulted in decrease in valuation of resale properties by as much as 70 per cent that is resulting in most of the sellers not wanting to sell.
Scenario of new properties also does not seem to be that good with prices going down to 30 per cent. Moreover, the shortage of labourers has further resulted in most of the projects in the city not being completed on time.
The drop in business had resulted in the state government to lower down the circle rates for two years in a row. However, property experts in the city feel that it will still take some time to recover.
"Earlier the property in Gurugram was being sold much higher than the circle rates and surely there was high amount of cash component that was involved. Post demonetisation, many do not want to sell the property beyond the circle rates that had led to the fall in prices. Today a resale property of Rs 8 crore has reduced to Rs 6 crore," said one of the real estate dealers in the city wishing not to be named.
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