“At a time when states like Maharashtra have kept their ready reckoner rates unchanged in order to keep the housing sales momentum going and for better housing affordability, it is detrimental to increase circle rates for the year 2021-2022," said Anuj Puri, chairman, Anarock Property Consultants.
“Doing so is bad for the overall housing demand which saw some new momentum, especially in the last two quarters. Moreover, increased rates affect housing sales by adding to the existing inventory of unsold stock," he added.
As per Anarock data, Gurugram has the highest inventory across the national capital region. As of March end, Gurugram had an unsold stock of 62,170 units, a 3% year-on-year rise.
Some, however, believe that the step in the right direction as it will reduce the cash component in property transactions, helping the end user.
In case there is a huge difference between circle rates and market rates, some people get the property registered at circle rate and pay the remaining amount in cash.
“The step is in the right direction and the aim is to curb the cash components involved in property transactions. This move will make the market more favourable for end users. Also, the decision will act as a deterrent for investors who want to park their unaccounted wealth. However, having said that, Gurugram real estate market needs support from the government to boost sales. It would help if this move came together with a reduction in stamp duty," said Ashwin Chadha, founder and president, India Sotheby's International Realty.
Developers want the administration to reconsider the decision as it may hinder recovery.
"We request the administration to deliberate on the ways to help the real estate sector in the city. The demand in the city is high, and we have been witnessing a good number of sales; this will automatically mean good revenue. However, increased circle rates will force the buyers to go into the shell, which will affect the revival," said Achal Raina, COO, Raheja Developers.