The Haryana government has reportedly slashed the circle rates of properties across segments by 3-8% in Gurugram for the financial year of 2017-18.
The reduction in circle rates of properties across Gurguram will benefit home buyers and developers along with reviving the sluggish real estate market, feel experts. The Haryana government has reportedly slashed the circle rates of properties across segments by 3-8% in Gurugram for the financial year of 2017-18. This is the second time the government has reduced the circle rates. In 2016-17, the Haryana government had slashed the circle rates by 10-15 per cent to boost the real estate sector of the region.
Experts have welcomed the move and said that by slashing rates, the government is surely focussing on reviving the real estate sector and giving a push to affordable housing. Samir Jasuja, CEO and Founder PropEquity, said, “By slashing circle rates the government has created a multiple beneficiary effect for consumers and builders in Gurgaon who were suffering due to real estate slowdown. Lowering circle rates should be seen in context with the affordable housing push by the government. It is a boost up message to the real estate market.”
Circle rates have a significant impact on prices. The stamp duty that the buyer pays is in accordance with the circle rates. A reduction of circle rates would help the buyer in saving on the stamp duty and registration fees. Circle Rates are the rates set by the government at which a property can be sold. These rates become the minimum applicable rates as well. All stamp duty calculations should consider, the prevalent circle rates in the area.
Reduction in circle rates will benefit home buyers and developers alike. Avnish Yadav, Deputy General Manager, Residential Services, Colliers International India, said, “Correction in circle rates is a state initiative to improvise the present market condition. Higher circle rate means more revenue to the state government, that means more fund in the hand of the state government which can be utilized for infrastructure growth. On the other hand, the reduction in circle rates will benefit home buyers and developers in things like stamp duty, registration charges, etc.”
The move is also expected to give a fillip to the housing demand in the Gurugram market. PropEquity’s Samir Jasuja added, “Gurgaon is a leading residential and commercial hub. In reality, the cut is an attempt to unlock the sluggish real estate market. It is now time for homebuyers to invest confidently in real estate. By the end of 2017, we are expecting green shoots for housing demand revival.”
In line with Jasuja’s thoughts, Yadav said achieving circle rate closer to the market rate will boost demand in the market.
The move to slash the circle rates will put Gurgaon in an advantageous position. “Gurgaon will have a unique advantage over the other NCR regions. In most of the other regions, prices are going up, circle rates are being revised. Now it seems, authorities in other cities will have re-think their strategy on circle rates. It also gives a fillip to affordable housing which has been a focus point of both state and the central government, ” Sopan Gupta, Principal Partner, Square Yards said.
He further added that Gurgaon property market has been for some time now, a buyer’s market. The slashing of circle rates further emphasizes on that fact. The cut in circle rates will also increase the numbers of end users buying houses. Builders too will benefit from the positive sentiment building up in the market.