Tamil Nadu has reported third-highest stamp duty and registration charges, after Maharashtra and Uttar Pradesh, during the eight months of this fiscal, supported a recovery in the real estate sector in the state.

The cumulative revenue from stamp duty and registration charges (SD&RCs) across the country stood at ₹100,125 crore for the April-November 2021. In FY21, total SD&RCs collections were at ₹127,752 crore, according to a study by Motilal Oswal Financial Services Ltd.

Residential sector performs well

“The residential real estate sector has bounced back strongly since 2HFY21 and it continues to perform well in FY22. It is doing better than anticipated. We hope that the Government provides some incentives to this sector in the upcoming Budget as it has the potential to boost GDP growth substantially,” said Nikhil Gupta, Chief Economist, Motilal Oswal Financial Services.

Among the states, Tamil Nadu witnessed the third highest collection at Rs.8,670 crore during April-November 2021 period. Maharashtra recorded the highest collection of ₹17,097 crore, contributing 17.1% of the total collection. Uttar Pradesh occupied the second position with a collection of ₹12,796 crore. Karnataka reported the 4th highest collection at ₹8,372 crore.

In the revised budget for FY22, the Tamil Nadu government has pegged receipts from stamp duty and registration charges at ₹13,253 crore for 2021-22.

“Tamil Nadu’s realty market has seen a strong pent-up demand in the recent months. Also, the IT sector, a major driver of the residential market in Chennai, wasn’t impacted. While IT employees didn’t suffer any job losses or salary cuts, they could also save a lot of money due to work-from-home culture. Thus, those IT people who were waiting to buy came back and bought homes after the lockdown phases, according to top officials of leading realty players in Chennai.

Shift in buyer’s trend

“Also, in recent years, buyer’s trend shifted towards ready to occupy or near readiness to occupy projects. This has forced the realty players to complete the projects quickly and make them available for sale. “The old days of seeing foundations and booking homes are all history now,” they added.

Echoing their views, Suresh Krishn, President, CREDAI Tamil Nadu, pointed out that the recovery for the residential sector in the state began after the first wave as people realised the need for bigger homes in all categories. The pandemic phase also resulted in huge savings for people who didn’t have the opportunity to shell out money in travel or shopping activities.

“Also, in the past five years, prices in the Chennai market didn’t increase much. Supply also dwindled. So, one side demand was seeing a gradual revival, unsold inventory levels were coming down on the other side. So, there has been a good demand in the past year. Of course, some consolidation also happened and those who have the sustaining capacity have been able to do better,” he added.

Meanwhile, buyers’ change in mindset towards completed buildings also had some impact. So, projects had to be completed to meet customers’ expectations. Thus, many good factors have supported the recovery in demand and thereby boosted revenue collections. We expect the growth trend to continue for 3-4 years,” Krishsn added.

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