 "Mumbai realty registrations down 11%, price cut in the offing?")
With declining property registrations, an indication that home buyers are staying away from purchasing houses, can Mumbai expect a prices cut in properties? Maybe not.
Property registrations have been falling for over a year and a half now. In January , registrations were at 4,427 in Mumbai, a sharp decline from 5,900 in December 2011. The February figure shows that the property registrations fell 11 percent year on year, reported The Economic Times on Wednesday.
The low figures make many expect that the developers will have to cut prices across the board now to attract more people to buy properties. But this year’s budget may not let that happen.
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The proposals presented in the budget are likely to increase construction cost. The hike in the service tax will also increase the price. And who will have to pay for it? Ofcourse, the buyers.
As Firstpost noted earlier, the buyer will have to deposit 1 percent of the sale value as Tax Deducted at Sources to the government, invariably becoming the tax collector for Pranb-da.The TDS has been imposed to ensure that property transaction details are captured by the registrar.
Economic Times also reported that on a monthly basis, real estate registration dipped 25 percent while preference towards leasing as against outright buying continued.
The RBI rate cut hasn’t been an incentive enough to attract more buyers. Developers might have given a thought to cut prices, but Pranab-Da’s budget will not let that happen. Atleast, not so soon.