Impact will be less on apartment business, more on land : CREDAI
The withdrawal of Rs 500 and Rs 1,000 currency notes which came into effect from Tuesday midnight will have less impact on the
Visakhapatnam: The withdrawal of Rs 500 and Rs 1,000 currency notes which came into effect from Tuesday midnight will have less impact on the apartment sales, but could be more on site business, said former president of Confederation of Real Estate Developers Association of India, local unit Raja Srinivas.
Talking to this correspondent here on Wednesday, Srinivas said around 500 builders construct on an average 10,000 flats valued at Rs 30 lakh each in two years. Average turnover per annum would be to the tune of Rs 15,000 crore.
Most of the customers are employees and from the middle class who obtain loans from the banks. These segment of buyers constitute 95 per cent in the city which has host of industries, educational institutions, banks and public sector undertakings. ``The question of getting black money does not arise with regard to sale of apartments,’’ Srinivas said.
But in case of purchase of plots from layouts, the exchange of cash component would be more and the buyers are usually from the trading and business class.
``If an apartment costs Rs 50 lakh in the city limits, a plot measuring 200 square yards on the outskirts would be around Rs 80 lakh to Rs 1 crore,’’ he added. The system is such a cantankerous that there is a huge difference between the basic value register and the value of the property in the open market, said a senior lawyer of the city TVS Kanaka Raju.
He said in other words the value for the purpose of registration is quite low and the value agreed upon between the willing seller and the willing purchaser is too high. Citing an example, he said Anandapuram is an area where real estate activities are at its peak. An acre of land at Anandapuram till Tuesday was costing Rs 3 or Rs 4 crore. Whereas the registrar’s office value is only Rs 35 lakhs per acre.
``What is the fate of common man, who sells an acre of land by the date of this announcement? much against his wish he would be receiving Rs 3.65 crore in black per acre?,’’ Kanakaraju said.
This announcement should have been made only after ensuring that the value in the basic value register and the value of the property in the open market are substantially one and the same. The government without rectifying the defects of the system thoughtlessly and irresponsibly made an adventure. It is the common man, the middle income group and those above the middle income group who are the first victims of this thought less adventurous exercise, he added.
