50% drop in real estate deals in Kerala since demonetisation

The land registrations recorded a drop of more than 50% in two months after currency ban.
The state revenue from stamp duty and registration also dipped.

Land transactions take a hit in Kerala after demonetization

Ramachandran, a farmer from Varavoor in Thrissur was about to sell his one acre land to raise money for an emergency. He entered an agreement with a buyer to sell the land for Rs.29 lakhs. He also received Rs.5 lakh in advance.

But with in days, demonetisation was announced dashing his hopes to the ground. The buyer backed off from the purchase. Ramachandran had no choice but to sell off his land at a much lower price to someone else. The new buyer bargained hard and the deal was fixed at Rs.22 lakhs. Ramachandran lost Rs.7 lakhs in a matter of days.

Ramachandran is not an isolated case. The real estate brokers in Kerala say that the transactions have dwindled like never before after the demonetisation.

The land registrations recorded a drop of more than 50% in two months after currency ban. The state revenue from stamp duty and registration also dipped.

But why this dip in land transactions?

After the crackdown on black money, land transactions could only be made as per the fair value fixed by the government. But market value is much higher than the fair value. If the market rate was recorded in registration, the fee would also shoot up. Besides this unaccounted money could not be used for transactions. All these factors brought down the land transactions in the state, a broker told Asianet News.