Property prices in Noida and Ghaziabad fall by over 20 per cent
Real estate prices in Delhi and NCR are expected to fall further with many areas already witnessing a fall of over 20 per cent, year-on-year as per National Housing Bank’s Residex Index, which tracks residential property prices across 26 Indian cities. This is contrary to the scenario that was prevalent in the region about a couple of years back. Incidentally, residential property prices increased by upto 40 per cent in 2013, as the authorities of Noida-Greater Noida, Yamuna Expressway and Ghaziabad hiked the circle rates by up to 40 per cent.
Circle rate is referred to the minimum rate fixed by the civic authorities for valuation of immovable properties in a particular area. This rate is considered by the competent registering authorities during the registration of documents related to property transactions.
The new rates have been implemented in all the residential, commercial and industrial sectors of Noida, Greater Noida, Ghaziabad and UPSIDC properties by the concerned authorities.
However, the circle rates were not increased uniformly in all the areas. In rural areas, where the population is less, the circle rate hike was kept lower while the hike was greater in regions where more land transactions were taking place and prices were increasing often.
Around 10 to 30 percent hike has been announced in case of residential, group housing, commercial, industrial, and buildersâ plots in Noida Extension, Yamuna Expressway and UPSIDC properties.
Owing to this hike, the properties in these areas are going to witness increase in their prices. For instance, the properties in NRICity in Greater Noida’s Pari Chowk are expected to cost high hereafter, wherein the on-going rate is rs 23,000 per square metre. In case of commercial properties in sectors such as Alpha, Beta, Gamma, Swarn Nagari, NRI City and Golf Link 1, the average rate per sq m is around Rs 83,000 per sq m.
Despite the hike of circle rates in rural as well as urban areas, the residential sectors would see the maximum hike since a large number of transactions has been happening in places like Noida Extensions, Noida-Greater Noida Expressway, Raj Nagar Extension, Crossings Republik and Indirapuram Shipra Sun City.
The already developed sectors have been fixed with higher circle rates compared to that of the developing sectors. For example, the new circle rates are in the range of Rs 3,000 to 66,500 per sq m in developed sectors of Noida like Sectors 11, 12, 14, 14A, 15A, 16A, 27, 39, 49, 52, 93A, 93 while in developing sectors like Sectors 45, 73, 74, 75, 76, 77, 78, 79, 82, 112, 113, 131, 135, 137, 158, and 162 it is around Rs 26,000 to Rs 28,500 per sq m. The circle rates in rural areas including Bahlolpur, Chotpur, Haibatpur, Naya Bans, Chhalera Bangur and Hajipur are in the range of Rs 7,000-15,000 per sq m.
Ghaziabad district administration has released new slab of rates after the hike in circle rates. As per this data, the new circle rate in upmarket areas like Kavi Nagar is now around Rs 36,000 per sq m, while in areas like Kaushambi, Ramprastha, Vasundhara, Vaishali and Indirapuram the rate is Rs 45,000 per sq m.
The reason behind the hike in circle rates in Ghaziabad is shortage of revenue collected by the government through stamp duty. In order to fill the huge gap that exists between the prevailing property rates in the market and those as fixed by the government.
Owing to the hike in development charges from Rs 650 to Rs 800 per sq m and revision of sector rates, the prices of properties in Ghaziabad get costlier by 25 to 40%.
Besides increasing the development charges, the Ghaziabad district administration has also announced a new policy, as per which, the new circle rates will be recovered sector wise. Earlier, it was recovered based on the area divided into top Hindon and trans-Hindon zones.
Subsequently, the Ghaziabad Development Authority (GDA) recovered the development charges according to areas divided into different colonies based on the Ganga water supply. The development charge recovered in top Hindon areas like Raj Nagar, Nehru Nagar, Kavi Nagar, etc., was at the rate of Rs 1,847 per sq. m, while in areas classified as non-Ganga water supply zones, the civic authority hiked the development charge by Rs 653 per sq. m.
Thereafter, the residents of top Hindon zones had to pay development charge of Rs 2,500 per sq. m and in trans-Hindon zones such as Vaishali, Indirapuram, Kaushambi, Vasundhara, etc, the development charge was increased by Rs 652 per sq. m. Ganga water was supplied in trans-Hindon areas.
So from now onwards, the residents of top Hindon zones should now pay development charge of Rs 2,500 per sq m and the trans-Hindon zones areas such as Vaishali, Indirapuram, Kaushambi, Vasundhara, etc, the development charge has been increased by Rs 652 per sq m over the current charge of Rs 1,948 per sq metre. Ganga water is being supplied in trans-Hindon areas.
Market analysts say that, with the increase in circle rates, potential buyers will end up paying more money on the stamp duty. However, developers have been trying their best to absorb price fluctuations and are showing interest in affordable housing projects. Although there are no signs of price hike in the present, if the property market does not improve and if the prices of construction materials do not come down, then the rise in prices of properties will be definite. The state governments should also watch out other important aspects such as decreasing stamp duty charges, rationalising input costs, decreasing home loan rates, etc which alter the real estate rates and pass the pressure on to buyers finally.
The circle rates in Delhi-NCR have been hiked many times subsequently, and this has affected the realty market to some extent. Increasing the circle rates is surely a good way to bridge the gap between market price and government price, and thus help in generating more revenue to the government. But going forward, the higher revenue to government should also lead to a better overall infrastructural development. Rather than only burdening end-users with more and more rate-hikes, the government should also start spending better on developmental activities.
