Bangalore real estate-2013: A look back

Real estate, as a commodity is always seeking eyeballs, and for Bangalore’s realty sector the year 2013 has garnered all the attention from the investors and developer fraternity. For the real estate market of Bangalore, the year 2013 has witnessed a steady mix of projects, targeted at different price brackets. From various legal regulations to infrastructure developments, the real estate sector of Bangalore has seen it all in 2013. Below-mentioned is a brief rundown of the major real estate activities of Bangalore in 2013 that require a special mention:

Regulations and reforms

• The Akrama-Sakrama scheme has managed to draw the attention of the home buyers in the city. After being put on hold for the last three years, the government finally gave a nod to the scheme. For 8 lakh illegal constructions and more than 6 lakh violators of by-laws in the city, the scheme has been tagged as a golden and one-time opportunity to regularize their construction.

• The year 2013 bore witness to a New Master Plan-2015 for outer Bangalore, to fuel a balanced and condensed growth on the outskirts of the city. The new master plan will re-designate commercial, agricultural, industrial, forest and waste land coupled with dry and irrigated zones of outer Bangalore. For property experts, the re-designed master plan projects a rigid and symmetrical urban growth of the Silicon Valley of the nation.

• Revision of the Guidance Value of real estate properties in Karnataka, has been the real game changer in 2013. In a move to roll up a sum of Rs 840 crore, the government has increased the guidance value for properties to the tune of 40-100% in few areas. However, the registration fee and stamp duty remained unchanged at 1% and 5% respectively.

Infrastructure and developments

• Upgradation of the Metro reach 1 phase, in a move to decongest the traffic along the stretch from MG road to Baiyappanahalli, has been the newsmaker in 2013. Completion of the proposed 42.3 km stretch, including the 8.8 km underground extension is estimated at Rs 11 crore and required the coordination of a multi-agency group.

• The Bangalore Mumbai Industrial corridor, proposed in 2013 is likely to give impetus to the realty sector of Bangalore, along with Mumbai. According to experts, the passageway will connect the IT hub with Tumkur road (north-west), which will tone up the commercial, industrial and residential growth of the city.

• More than 189 roads and 42 bridges in the city has been proposed to offer a helping hand from the NABARD National Bank for Agriculture and Rural Development) at an expense of 192.38 crore. Experts are of the notion that such a move will provide an edge to the real estate market and re-define its connectivity for good.

Policies

• The Karnataka government proposed to re-introduced the land revenue bill, which aims to regularize the residential units constructed on off-limits on the government land in urban locations. In the proposed legislation, houses that were built within 10 km radius of the corporation limits and 3 km from the Town Municipal Council limits, will be regularized.

• The RBI has increased the Repo rate by 25 basis points and stood out to be the major cause of disappointment for property investors in 2013. A hike in borrowing cost has cast a black shadow on the number of property transactions in the city, which in turn has emerged into a major issue for the real estate sector of the city. The hike in the benchmark interest rate has been from 7.25% to 7.50%.

Tax and investments

• By implementing TDS (tax deducted at source) on the transfer of immovable assets worth Rs 50 lakh or more, the Central government has been successful in gaining the spotlight for quite sometime in 2013. As per the provision, the rate at which tax is to be deducted is 1% of the amount paid. In the absence of a Permanent Account Number, the rate of TDS will stand to 20%.

• Hike in property tax by the BBMP (Bruhat Bangalore Mahanagara Palike) has acted as a huge blow for the buyers in 2013. According to market sources, the Standing Committee on Tax and Finance of the BBMP has proposed for an increase of 20% for residential units and 25% for commercial units.