The Impact Of Revised Circle Rates In Delhi NCR

dlftowerBy Santhosh Kumar, CEO – Operations, Jones Lang LaSalle India

By Accommodation Times Bureau

The upward revision of Delhi’s circle rates has created a furore of conjecture in the real estate fraternity. This is understandable, but it is important to understand what the real implications will be. In fact, this revision will not have any immediate impact. Property prices in general are governed by market forces – namely demand and supply. Property rates in Delhi NCR’s secondary market already surpass the existing circle rates, and even the revised rates. That said, upward revision of circle rates has always resulted in a marginal increase in property prices, so a nominal increase in rates in NCR’s secondary market over the mid-term cannot be ruled out.

Circle rates are basically the minimum valuation at which land and immovable properties in the city have to be registered with the Government. The upward revision in circle rates will certainly cause official property valuations to rise. Property registration costs will increase as the minimum amount at which property has to be registered (i.e. circle rates) has increased, along with the correspondingly stamp duty payable on the registry amount.

The revised circle rates will act as a deterrent to cash-rich investors who have made the NCR realty market a speculative hunting ground. HNI’s with larger financial appetites and stockpiled capital have been targeting this market with the aim of achieving massive returns. The revised circle rates across all property categories will now encourage a proportionate infusion of accounted-for money into real estate transactions.

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