New Delhi: The Haryana government’s proposal to increase circle rates will affect the ongoing and future real estate transactions in Gurgaon and add to existing inventory of unsold stock, leading developers and experts said.
According to property consultant Anarock, the proposed hike would further dampen end-user and investor sentiment. Both primary and secondary housing markets will be hurt by the hike. “In recent times, plotted developments have led to growth and builder floors were preferred by the buyer. With the increase in circle rate, which is more than the market rate, there will be no buyer,” Association of Property Professionals-Delhi NCR president Kshitij Nagpal said.
The government recently released the proposed list with new collector rates (for the second half of 2019-20) for all regions including Gurgaon, Harsaru, Manesar, Wazirabad and Sohna. Contrary to expectations, rates in a few major markets in Gurgaon are proposed to be more than doubled, even as demand and liquidity are tepid. “The proposed circle rate hike is bound to have an impact on Gurgaon real estate, especially luxury housing. The demand for luxury will be down with this revised rate. The move will also enhance the prospect of alternative locations such as New Gurgaon emerging as the new focus for homebuyers,” said Anupam Varshney, the head of sales and marketing at realty firm Vatika Ltd.
According to developers, housing societies on Golf Course Road, one of the prime markets, would be hit hard as the proposed circle rate was Rs 17,000 per sq ft, against market rate of Rs 12,000-14,000. “No one will sell the flat or floor in less than the circle rate and with the increased circle rate, no one will buy the property,” said Pradeep Mishra, general secretary of Gurgaon-based Association of Real Estate Developers.
Anarock research indicated Gurgaon had the highest unsold stock in National Capital Region at 57,950 units as of 2019-end. Developers feel Gurgaon’s hike could give a major lifeline to the markets in Noida and Greater Noida. “Raising circle rate so sharply is the last thing required, and is out of sync from market dynamics,” said Nayan Raheja, executive director, Raheja Group.