Gurugram Circle Rate Hike to Impact Luxury Housing Market

By : 360 Realtors

19 February, 2022

When it comes to luxury homes, Gurgaon is among the top real estate destinations in India with a notable concentration of high-end units. The property market here has recorded a significant rise in the sale of luxury homes over the decade. This trend was also accompanied by a constantly growing number of high-end real estate projects in Gurgaon. Attracted by the lucrative market for such properties, reputed developers have been taking up luxury housing projects in the city. However, the luxury housing market here is now likely to be affected by increased circle rates.

Circle rates are minimum prices at which properties can be sold. The state government controls the circle rates and adjusts them to ensure that they would stay in line with the price trends in the market. In Gurgaon, the circle rates have been increased by 10% to 25%, particularly in localities where luxury housing has flourished. These include Golf Course Road, Golf Course Extension Road, Dwarka Expressway, SPR and other coveted locations in the city.

The spike in the circle rates would naturally result in increased property prices, especially in case of luxury homes. One might want to note that the registration charges and stamp duty are determined based on either the circle rates or the actual price of the property, whichever is higher between the two. These fees help the government earn major revenues, which implies that the increased circle rates would help the state make more money from real estate transactions.

Opinions regarding the increase in circle rates are divided. Some feel that it would put an additional burden on property buyers due to increased stamp duty charges. This could potentially dampen the end-user and investor sentiments in Gurgaon, where the real estate sector had started reviving. On the other hand, this may potentially have a good impact on other parts of the NCR, such as Noida. While the ultimate impact of the increased circle rates remains to be seen, the real estate market in Gurgaon would still continue to be a great choice for investors.