Cell to monitor property prices on the cards

It will help assessment of property values more realistically.

The Karnataka government has decided to set up a separate cell to monitor property prices across the State.

It will also suggest revision of guidance value on a scientific basis is on cards with the Department of Stamps and Registration seeking the Government nod.

The cell with property valuers, town planners, engineers and statistical officers will be created shortly, and it will monitor price variations in the market.

Currently,  the guidance value was being fixed unscientifically and always remained on the lower side of the market value. “It is the clinching factor for the Government to raise revenue and should not be based on whims and fancies” an official said.

Currently, the guidance value is revised after seeking reports from sub-registrars. A central valuation committee (CVC) headed by the IGR and comprising members from the public, studies the reports, announces the values and calls for objections before the final notification is issued.

The proposed cell will assist the sub-registrar and will give its suggestions to the CVC, following which the guidance value will be revised. Members of the cell will also scout realty and property exhibition to understand the market, the official said.

The cell will enable the department to revise the guidance value annually as mandated by the Karnataka Stamps Act.

Incidentally, guidance value of the properties in Bangalore was revised after more than four years.

The proposal will be submitted to the Finance Department for approval as it involves creation of new posts.

Developer Needs 34 Clearances to Complete Project

High stamp duties and difficulties in land acquisition are some other issues, which need to be addressed.


Delays in project clearances have helped property prices to increase by 40 percent in India. Usually, to start a new project, 34 procedures are required to obtain clearance which takes an average time of six months.

According to the Economic Survey 2013, “India’s housing and real estate sector faces many challenges. There are 34 procedures and the average time taken is 196 days, which increases the sale value by 40 per cent,” according to the Economic Survey for 2012-13.

Quoting the latest World Bank report, the survey stated that in terms of housing, India is one among the top countries but when it comes to project clearances, it ranks 182nd.

Rapid increase in land prices, absence of a long-term funding and lending market at fixed rates, limited developer finance, the Urban Land Ceiling Regulations Act (ULCRA) continuing in some states, existing lower floor area ratio in cities, high stamp duties and difficulties in land acquisition are some other issues, which need to be addressed, said the
survey.

In India’s total GDP, the real estate sector and the housing sector contribute a share of 5.9 percent and have seen growth of 7.2 percent in the year 2011-12.

The survey also said that property prices have become reasonable during the current financial year.
“As per the National Housing Bank RESIDEX index for the quarter July-September 2012 compared to April-June 2012 (covering 20 cities, with 2007 as base year), there is a general decline in prices of residential properties in some smaller towns, while the increase in other cities is mostly marginal,” the survey added, reports . With the increase in urbanization, the demands for housing in cities have been increasing over the years.