Indore real estate sector slows down over soaring rates

Indore: Indore is witnessing a significant slowdown in its real estate market, if one goes by the records of stamp and registrar department.The records show a nearly 10% decline in number of property registrations (sale deeds) so far this year, translating into an estimated drop of Rs 4,000 crore in total property transaction value. As of now, the department has recorded 68,700 sale deeds, which is in a sharp contrast to 78,500 registrations documented during the same period last year."If these 10,000 registrations were completed, they would have generated approximately Rs 400 crore in revenue. The department typically collects an average fee of 10% (inclusive of stamp duty and registration) on the property's value. Based on this calculation, Indore saw a drop in property sales worth roughly Rs 4,000 crore," senior registrar Amresh Nayadu said.He added that the average property registration value in the last financial year was around Rs 50 lakh per deed, which reduced to about Rs 42 lakh per deed this year.According to officials, the primary driver for this slump is the ‘unaffordable' price ceiling reached in several localities. Average prices currently start at Rs 5,000 per sq ft and climb as high as Rs 30,000 per sq ft in premium areas. The post-Covid-19 investment surge, which saw a frenzy of buying, tapered off significantly. "This year, we recorded a noticeable drop in property investments as both end-users and investors showed less interest due to the high rates," Nayadu said.Despite the slump, the department generated Rs 2,250 crore in revenue so far and expects to reach Rs 2,700 crore by the end of the financial year on March 31.Real estate experts, however, gave more reasons behind this considerable drop in property sales in the current financial year."The collector's guideline for the current financial year was very high, while the stamp and registration duty is already at and above 10%, which is making properties costly," CREDAI Indore wing president Sandeep Shrivastava told TOI. He said that they would approach the officials concerned for a drop in both collector's guideline and stamp and registration fee."Investors showing interest in precious metals is also a reason behind the slump in the real estate market. This year, gold and silver gave very high returns," Shrivastava added.While sales slowed, the official valuation of land is set for a substantial increase. The department has started preparing Collector's guideline for the next financial year, which serves as the base rate for property taxes and registration.GFXFY 2026-27: Likely ScenarioScope of Revision Expected Impact Total Locations Evaluated 4,800Locations Seeing Hikes 3,000Hike Range 10% to 200%New Locations To Be Added 80Around 50 prime locations are expected to see a massive 200% surge in their guideline rates, while 170 locations may see their rates double (100% rise). These revisions are based on market analysis and instances where actual transaction values far exceeded the existing govt rates