Property transactions drop in election year

HYDERABAD: Property transactions, especially of agricultural lands and properties, have declined in the election year even as non-agriculture property transactions went up marginally, according to the stamps and registrations department.

Considered in real estate circles as a key election financier, experts said that realtors usually halt transactions in the election year, which causes a slump. This time, it is expected to extend till April-May 2024, until the Lok Sabha elections.

In the current financial year (2023-24), agriculture land transactions worth Rs 659 crores took place from April 1 to August 10, lower than the figure of Rs 880 crores, recorded during the same period in the 2022-23 fiscal, marking a total dip of Rs 221 crores.

In April 2023, the value of agriculture land transactions was Rs 150 crores, against Rs 193 crores in April 2022. Similarly, in May 2023, the land transactions were worth Rs 161 crores, against Rs 211 crores in May 2022. In June 2023, the land transactions were worth Rs 162 crores, against Rs 221 crores in June 2022. In July 2023, it was Rs 146 crores, against Rs 201 crores in July 2022, while it was Rs 42 crores, till August 10, 2023, against Rs 55 crores, from August 1 to 10, 2022.

However, the value of non-agriculture property transactions went up from Rs3,895 crores in the 2022-23 fiscal to Rs 4,240 crores in the 2023-24 fiscal, till August 10.

A prominent city-based realtor said: “Politics, elections, and real estate are inter-connected. Most of the politicians and their close aides have interests in the real estate sector where a considerable amount of unaccounted money is invested. In the election year, especially a few months before the Assembly and Lok Sabha polls, they don't invest money in real estate as they need huge cash to meet poll expenditures. This is the prime reason for the slump in the real estate sector. This phenomenon is not just confined to Telangana but the entire country.”

The realty sector in the state is also heavily dependent on investments from NRIs, especially those in the US, Canada, European, and Gulf countries. “A significant chunk of investments comes from NRIs. They invest in agriculture and non-agriculture properties. But due to the recession and job loss in major global economies this year, there have been no major investments from NRIs. This has also contributed to a slowdown in property transactions in the state,” the realtor said.