How can the Bengaluru Real Estate sector move ahead of other cities in India? How can the Bengaluru Real Estate industry go a notch higher? How can Bengaluru become the trailblazer in Real Estate dev
Bengaluru is no doubt the city that achieves record sales in housing units and witnesses a huge surge in property prices despite the severity of the Covid-19 pandemic. The Garden City has undergone massive development and transformation over the years. Builders and Property developers have also welcomed the Real Estate Regulatory Authority (RERA) established by the Government of Karnataka. It has made all the property dealings highly accountable, investor-friendly, and transparent.
Here is a list of suggestions to boost growth in Bengaluru’s booming Real Estate industry
- Decrease in stamp duty for all types of properties - The Karnataka Government announced a reduction in stamp duty (from 5% to 3% in March 2021. However, it applied only to the affordable home segment valued in the range of Rs 35 lakh to Rs 45 lakh (around 24% of unsold housing units).
A significant 64% of Bengaluru’s sale of housing units come under the mid-segment (Rs 50 lakh to Rs 150 lakh). The Government of Karnataka can consider waiving off the 5% stamp duty for mid-segment properties to enhance housing demand.
- Extension of RERA timelines due to liquidity crisis - Small-scale property developers are facing serious financial troubles due to the Covid-19 pandemic. With low cash flow and the debt burden, developers need adequate liquidity for refinancing.
The RERA - Karnataka can give builders extension for around 6 to 9 months in deadlines (project handover). The government authorities can also reduce the approval costs (construction premiums) for a certain duration in these times of economic downturn.
- Introduce e-registration facilities for all types of projects - In times where sub-registrar offices are rarely open due to the lockdown, it is ideal to accept online registration for new residential housing.
This will help property developers as they will receive loans quickly from banks. Financial service companies will have enough income in the form of advances to grant credit. Eventually, this leads to an enhanced cash flow resulting in faster completion of projects.
Likewise, flat and plot buyers will get capital gain exemption through online property registration facilities. Purchasers have to register their new property online within 3 years after selling their old housing unit. Karnataka is the undisputed leader in new affordable project launches (46%) in India as per a report published by Housing.com.
Fees for stamp duty can be collected via digital payment methods like credit cards, debit cards, and net banking instead of using cash. This will ensure consistent collection of revenue for the Government of Karnataka.
Wrapping Up
Small changes in policies will help bolster the future of the Bengaluru Real Estate sector. This would contribute to the goal of affordable housing and greater registration of new projects. All the 3 important stakeholders, the homebuyers, the Karnataka Government, and the property developers will benefit from some friendly economic stimulus measures. Ultimately, this will help everyone to fulfil all their objectives perfectly.
