In a step to boost the ailing real estate sector, the Delhi government has decided to slash the circle rates of residential/commercial/industrial properties in Delhi by a whopping 20%. This reduction in rate will be in place for the next six months and will bring down the cost of buying a home among other things in the capital.
“Circle Rates of Residential/Commercial/Industrial Properties in Delhi reduced by 20% across all categories for next 6 months. This would be a big relief for people willing to buy property and a big boost up for real estate sector,” Delhi chief minister Arvind Kejriwal tweeted on Friday.
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“Reducing circle rates, even for only a limited period, is great news for the Delhi housing market because it help to further bring down property prices,” said Anuj Puri, chairman, ANAROCK Property Consultants.
Circle Rates, for the unaware, is the minimum rate fixed by the state government at which the sale or transfer of a plot, built-up house, apartment or commercial property can occur. This rate is not fixed and revised from time to time as per the market condition.
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Also, there could be a difference in circle rates for differnet cities in the same state. This depends on the market value and facilities available in the area. A reduction in circle rate probably allows more cash in the hands of the buyer in strained times like the one we are currently living in.
Industry Lauds the Move
“This step indeed will propel buy and sell activity. A move of this nature will also enable owners of large assets to mobilise transactions which otherwise were challenging given the size and consequent values,” said Shveta Jain, managing director, Residential Services, Savills India.
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“A reduction of 20% in the circle rate would have an impact close to reduction by 1% in the stamp duty or registration charges. The department was directed to do an exercise accordingly,” the statement said.
Lauding the move Housing.com, Makaan.com & Proptiger.com Group chief operating officer, Mani Rangrajan, said, “The circle rates have a direct bearing on the actual market rates, a reduction in circle rates not only will soften property and land prices in Delhi but also put pressure on other adjoining realty markets of the national capital region.”
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“Considering the strong revival post lockdown easements, this augurs well for the market. By bringing down the circle rate, the Delhi government seeks to create a conducive environment for accelerated housing absorption in the market,” Puri added.