At a time when the realty market of the National Capital Region has just started recovering from the impact of the Covid-19-induced lockdowns and needs a softer pricing regime apart from other sops from the government to tide over the current crisis, the Gautam Budh Nagar administration has proposed to hike the existing circle rates in Noida by up to 40%, which is definitely not good news for the region’s property market.
Property consultants, developers as well as prospective homebuyers, therefore, are surely not happy with this proposal and want the authorities to reconsider this ill-timed move as it will make homebuyers pay more for a piece for property and also dampen their sentiment.
For instance, Anuj Puri, Chairman, ANAROCK Property Consultants, says, “The proposal to raise the circle rates in Noida, Greater Noida and along the Yamuna Expressway by as much as 40% and additionally apply a 5-12.5% surcharge on properties along the Metro route or near the Expressway could not have come at a less ideal time. The NCR real estate market has only just begun recovering from the dual impact of Lockdowns 1.0 and 2.0. At this point in time, a softer pricing regime would have encouraged more buyers as they are still struggling with the economic impacts of the Covid-19 pandemic.”
Vikas Wadhawan, Group CFO, Housing.com, Makaan.com and Proptiger.com, is also of the view that the timing of the increase in circle rates is not appropriate and can further lead to delayed recovery from the impact of pandemic.
“The authorities should have taken inspiration from states like Maharashtra that witnessed a 270% jump in property registration after the stamp duty cut. The current situation calls for measures that can boost home buying sentiments, which will in turn increase revenue through sheer numbers without increasing the circle rates,” he says.
As per the recent consumer sentiment survey by Housing.com and Naredco, people are in fact looking for discounts and Flexi Payment scheme to conclude their home buying decision, and this increase in circle rates will have negative impact on the fence sitters.
“The increase in circle rates by the Gautam Buddh Nagar administration will dampen the homebuying sentiment in the Noida and Greater Noida region. The NCR market is already struggling with inventory overhang and low sales. An increase in circle rates at this stage will push the fence-sitters away from the housing market and delay the recovery of real estate in the region,” says Shravan Govil, CEO, Omaxe Heritage Pvt Ltd.
Developers feel buyers will now be discouraged from investing in real estate in the region.
Amit Modi, Director, ABA Corp and President (elect), CREDAI Western UP, says, “When we need help from the government, increasing the circle rate is discouraging. During the pandemic, real estate experienced a significant decline, but it has recently recovered, with individuals returning to look at potential apartments for future living. People, however, will now be discouraged from investing in real estate. We were expecting a decrease in the circle rates to bring more money into the market at this point.”
Builders say if the government wants to make ‘Housing for All’ a reality, it should give the sector a helping hand.
Harvinder Singh Sikka, MD, Sikka Group, says, “Rather than increasing the circle rates, the administration should have maintained the current levels. Buyers are seeking relief, and the increase might turn out detrimental to the market. The developer community is currently utilising all available tools to help buyers in realising their dream of owning a real estate asset, but it requires government help also.”