The concept of circle rate and its calculation has been a highly debatable issue. To make it simpler for everyone the circle rate is the minimum valuation done by the government for a particular property which is used at the time of registration. The recent fall in circle rate in Gurgaon( New Name: Gurugram) by 15% was majorly caused by the persisting slow market conditions. Circle rates are reduced to bridge the gap between ongoing price of the property and its government valuation. The ongoing market price is determined by the demand and supply of the property as since there has been an oversupply in the market and with the trembling issues of trust with the real estate market the Haryana Government had no better alternative in order to change the current market scenario.
But will this move be successful to again accelerate the growth pace of Gurgaon? Will markets like Ghaziabad, Noida, Greater Noida follow this move?
The circle rate reduction will not necessarily make homes cheaper for everyone. The major effect would be the reduction in stamp duty and registration charge which may not be enough to revert the scenario. Circle rates at both extremes (high or low) can be quiet disadvantageous. Property prices dropping might destroy the environment of housing with more people indulging in cash transactions, higher circle rates might discourage end users.
Another problem with circle rate in Gurgaon is that in few locations the circle rate is more than the market rate while in some locations the market rate is more than the circle rate. A person who buys a property whose circle rate is more compared to market rate have to thus pay a higher amount of stamp duty and registration charge which will be excruciating.
Noida recently increased its stamp duty from 5 to 7% and Ghaziabad has tried increasing the circle rate by a negligible amount but after seeing the effect of the strategy used by Haryana government will UP government try to run the same path?
Ghaziabad is considered to be the most suitable and affordable area to invest in Delhi NCR. Within Ghaziabad, Vaishali has seen the highest increase in the capital valuation. The area enjoys a superior accessibility as well as feasibility quotient. With 0 km distance from Delhi Border it is a convenient location be it related to facilities of metro, malls, or better locality.
Within the heart of Vaishali, in Sector 4, Thapar builders have come up with a new project, ‘The Arthah’ which is a luxury apartment with all modern facilities which includes amenities like split level parking, high speed elevators, tennis and badminton court, private rooftop deck and pool.
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