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Property market staring at a slump under new circle rates, say experts

In several areas, circle rates are higher than market rates, which is discouraging buyers.

By: Express News Service | New Delhi |
September 24, 2014 4:01:57 am

With the government hiking circle rates in the capital by 20 per cent, officials believe the revision will further close the gap with market rates and property transaction registered price will fall.

Those who want to buy properties in category A colonies such as New Friends Colony are in a dilemma as the new circle rate is now higher than the market value. For example, in NFC, the market value is Rs 5 lakh – Rs 6 lakh per sqm, whereas the prevailing circle rate is Rs 7.7 lakh per sqm.

According to experts, the property market is already witnessing a slump and the current circle rates have put buyers and sellers in a tricky situation.

Vikrant Gupta, who deals in properties in South Delhi that cost on the higher side, said for a 500 square yard plot, the market price is Rs 19 crore — Rs 20 crore. The revised circle rate for the same, he said, is Rs 25 crore approximately.

Sanjay Kumar, special inspector general (registration), said transactions should not be affected by high circle rates.

“Circle rate is just an indicative rate. If you have registered property on an amount lower than the circle rate, the sub-registrar will register it and the case will be sent to the registrar to verify the market value,” Kumar said.

Experts said the categorisation of colonies needs to be revised as there are properties that are still underestimated.

“At Shivalik Colony in Malviya Nagar, the rate is Rs 3 lakh. And Malviya Nagar falls under category C, where the per sqm rate is Rs 70,000 approximately,” Rajesh Arora, a property consultant in South Delhi, said.

For category E, experts believe that the current circle rates have defeated the purpose of the revision.

“There are DDA flats in Rohini that fall in category E area. The market price is Rs 90 lakh, whereas the circle rate is Rs 1.5 crore. The property transactions are already on a low,” Shyam Mohan Aggarwal, property consultant in North Delhi, said.

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