Since the past two years, Gurgaon has been witnessing a slow and sluggish growth in the Realty sector. The transaction volumes have been relatively low. In order to reduce the gap between the ‘going market rate’ at which transactions are carried out and the government-prescribed minimum value for registration of properties, the circle rates have been reduced by 15%.

This decision of the Haryana Government is being taken as a profitable move for the real estate sector. The developers and builders are elated and feel that this development will bring a substantial change in the market conditions.

While expressing his delight at this modification, Mr. Atul Banshal, President-Finance & Accounts, M3M, said, “This move will surely have a positive impact on Gurgaon’s real estate and trigger an upward growth, and also help in bridging adverse gap between circle rate and market rate at many locations”.

People willing to invest in property have been holding themselves back till now; builders are hopeful that they will find this move in their favour. Mr Banshal added, “The reduction in circle rates would reduce the overall cost as the rates are the basis for tax calculations levied by the government.

It will benefit the buyers as they had to pay stamp duty as per the old circle rates which would now be comparatively less. This will definitely encourage buyers to invest in properties in the region.”

Generally, the circle rates are revised and increased every year, as per the market rates of the property. However this is for the first time in a decade that the circle rates have been reduced in Gurgaon.

Talking about the development Mr Kunal Rishi, Vice President – Corporate & Projects, Paras Buildtech Ltd., said, “The real estate market was reeling under the sluggish property rates, the situation was further worsened due to the excessive circle rates. Buyers and investors who were earlier interested in buying property in Gurgaon were looking for other avenues. The buyers would be interested in buying the property due to the now lowered property rates.”

Mr Rishi further added that, “The developers and builders would now easily be able to push their sales. This is a mutual gain for the developers/builders and the buyers”. The developers and builders feel that this act of bringing the circle rates in tune with the reduced market rates will give a better leverage to strike the deals.

That being said, the industry feels that more such steps are required to ensure speedy recovery of the market.