KOCHI: The revenue collection from stamp duty and registration charges (SD&RC) in Kerala witnessed a 48% increase in the first six months of the current financial year (April-September), reflecting the heightened activity in the residential real estate market.
Experts said the main reason for the buoyancy is that the non-resident Keralites (NRKs) who returned to the state following the pandemic have started investing in land, villas or bigger family homes. According to a study by the Mumbai-based brokerage Motilal Oswal Financial Services, Kerala’s revenue from SD&RC for the first half of 2022-23 touched Rs 2,690 crore, an increase from Rs 1,810 crore during the same period last fiscal.
Experts, however, said the real estate sector may experience some headwinds in the coming quarters. With the economic forecast of a global recession in the 2023 calendar year, there is a real possibility of some slowdown in the real estate sector in the coming months, they said.
The study said the cumulative revenue collection from stamp duty and registration charges from 27 states and one union territory (J&K) in India stood at Rs 94,847 crore for H1FY23. This is a surge of 35%, from Rs 70,120 crore in H1FY22.
From the aspect of absolute revenue figures, Maharashtra leads the table with the highest revenue collection from SD&RCs at Rs 18,600 crore. The state contributed 20% of the overall SD&RCs revenue of the country in H1FY23. Kerala’s share of the total collection from stamp duty and registration charge is a mere 3%.
Srinivas Anikipatti, senior director (Tamil Nadu and Kerala) at Knight Frank India, a property consultant, said a large number of people who returned to their hometown following the pandemic has started re-investing in Kerala. “Work from home has been a key factor that has not only increased the demand but also prompted people to consider Kerala for their investment. Home-buyers are now looking for larger homes and investment in second homes has also increased gradually over these years,” he said.
“Almost 30%-40% of the people who have returned to India have started investing in land or villas or bigger family homes post-pandemic,” said Anikipatti.
The rise in demand has also impacted the prices and transactions in the residential markets of Kerala. NRKs working in the Gulf countries have typically fuelled the state’s largest and most urbanised cities, with remittances accounting for more than one-third of Kerala’s economy, he said.
Nikhil Gupta, the chief economist of Motilal Oswal Financial Services Ltd, said the residential real estate sector has performed superbly over the past 18 to 24 months and it continued to do well right up to 2QFY23.
“Most of the incentives such as stamp duty reduction, lower interest rates or lower prices have disappeared over the past six months,” he said.
“It is, thus, very likely that the sector may see some headwinds in the coming quarters. Add to that the real possibility of a global recession in 2023 calendar year and the real estate sector may be in for some slowdown,” Gupta said.