Comment by Mr. Ram Naik – Executive Director, The Guardians Real Estate Advisory on Finance Minister’s announcement – November 12, 2020.

The FM’s announcement of an increase in difference between the so called circle rates and the agreement value, will lead to further rationalisation of prices in the sector, especially in the premium or mid-income housing segment. While the same is applicable only for units priced lesser than 2 crores it will help developers in the primary market get an upper hand vis-a-vis the secondary market. The move can be attributed to the concerns raised by developers about their inability to reduce or offer lucrative prices because of the tax liability that would accrue as a result of price reductions. But on the other hand, the major part of the unsold inventory in metro cities is upwards of Rs.2 crores in the Rs.4.75 to Rs.12 crore range. A blanket announcement without the capping would have lead to cheers for developers across the sector and the customers, this Diwali.
Mr. Ram Naik, Executive Director, The Guardians Real Estate Advisory