Bengaluru developers say realty demand to remain unfazed by circle rate hike

economictimes.indiatimes.com:

The guidance value of all immovable properties across the state was revised during 2018-19 and came into effect in January 2019. The last update to circle rates was made in 2018-19, where it was raised by 25% before the erstwhile BJP government granted a 10% rebate on stamp duty was also provided to the sector. However, due to the outbreak of the COVID-19 pandemic, the guidance value of immovable properties has not been revised to date.

“We are quite bullish on Bengaluru’s real estate market and its long-term ability to generate stellar returns for investors. The properties will turn slightly expensive in certain micro markets in Karnataka if the guidance value exceeds the average free market rate. However, it is unlikely to impact demand sentiment,” said Darshan Govindraju, Director at the Vaishnavi Group.

According to industry experts, the revised guidance value will also help reduce spurious cases of undervalued properties by developers in the unorganised space and cash transactions. The recent circle rate hike is also a factor of inflation, and property value going up will help the government in generating more revenues and increase spending on infrastructure. “Given the price appreciation of over 10-20 per cent post-COVID, the revised guidance value will end up in line with market prices.

The impact will be felt only in the cases where property considerations have been undervalued. I don’t foresee any impact on sales from reputed developers,” Sunil Pareek executive director Assetz Property Group. The hike in guidance value will also be reflected in the price rise on the land sales due to better infrastructure and access.