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Impact of circle rate revision in Delhi NCRs realty

Rishabh Chamoli | 2022-09-05

Most housing hubs in Delhi NCR, namely Gurgaon, Ghaziabad, and Noida have increased their respective circle rates of residential properties this year.
Delhi, too, is planning to announce an upward circle rate revision soon.
Check out the exact increase in circle rates along with their impact on the property markets of different regions in Delhi NCR.

The pandemic witnessed decreased demand for properties across Delhi NCR.
Hence, the State governments refrained from revising the circle rates.
However, with a gradually improving economic landscape and home buying sentiment post pandemic, the circle rates in Gurgaon, Noida and Ghaziabad have been revised this year.
With Delhis hike looming closer, here is a look at how the revisions impact the realty landscape.

The circle rates in Delhi NCR have gone through an overhaul in 2022. Barring Delhi, the rates in the micro markets of Gurgaon, Noida and Ghaziabad have been revised by up to 20to30 percent by the Haryana and Uttar Pradesh governments, respectively.
As Delhis 20 percent circle rate rebate ended after over 15 months on June 30, 2022, reports have been rife that the State is set to increase the value by approximately 30 percent. But how does it impact the homebuyer community.
The circle rate is the minimum value a State government sets for a residential or commercial property below which it cannot be sold. Also known as the ready reckoner rate or guidance value, it can be different from the propertys market value as it is the price agreed upon between the buyer and seller.
The circle rate often varies from one locality to another, and it impacts the stamp duty and registration charges of a property. This indicative price is generally revised quarterly or bi yearly.

Gurgaon, Haryana

As home sales in the Gurgaon district witnessed steady demand from buyers, the circle or collector rates were revised after around two years, effective from January 1, 2022.
The Gurgaon administration implemented about 10 to 20 percent as they observed that the market prices in some localities were much higher than the prevailing circle rates.
Hence, in order to bring down the disparity between the market and the State set rates, they were revised.

While the collector rate across sectors now ranges between Rs 30,000 per sq ft and Rs 50,000 per sq yard, the rates for builder floor or multi storey group housing societies are from Rs 5,000 to 54,000 per sq yard.
The collector rates in the licensed colonies for plots hover around Rs 6,600 to 25,500 per sq yard.
The administration added that as the circle rate helps compute the stamp duty and registration charges, revising the rates had become imperative to ensure more revenue for the State.

While the State mentioned that they took the decision based on traction in the city, it is known that any surge in property values is passed on to the end buyer.
Thus, the developer community had mixed feelings about the revision, as it could potentially increase the burden on homebuyers by around 25 percent.

Noida, Uttar Pradesh

The Noida Authority, during one of its board meetings, implemented over 20 percent increase in the circle rates across the property categories in August 2022.
The rates have been revised for categories A to E by around 20 percent, from Rs 36,200 to Rs 41,250. Also, a similar hike has been affected in the property values of group housing societies.
The rate remains unchanged at around 1,75,000 per sq m in the A, and B Blocks of Sectors 14A, 15A and 44 as these areas are categorised as A Plus.
The industrial properties in the second have also witnessed a 30 percent surge, while the circle rates of properties in the first and third phases have been revised by 20 percent.
Although the circle rate revision has come after around three years, experts believe it will make the fence sitters more apprehensive.
With a rise of approximately 15 percent in the property values, courtesy of the circle rate hike, developers may delay launches putting further pressure on the citys real estate.