Realty prices set to increase

The proposed hike of the ready reckoner rates by approximately 20% from the next annual year will impact to the real estate industry.

The proposed hike of the ready reckoner rates by approximately 20% from the next annual year will impact to the real estate industry.

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It would increase the cost of new flats substantially.

“The ready reckoner is the base value and hence the hike would have a cascading effect on all other factors,” said Vinod Sampat, president, Cooperative Societies Residents Users and Welfare Association.

The ready reckoner is a guide published annually by the state government, which determines the rate of the property in a particular area on which the stamp duty and registration charges are levied. Now, even the developmental charges, cost of premium charged on exemption of floor space index (FSI) like staircases and lifts, and even the new property tax structure are linked to the ready reckoner.

Justifying the hike, Sampat said: “Realty costs have reached the sky and there is nothing wrong if the state gains from this.”

This means, the landowner has to pay more stamp duty as his property would be valued at higher price. The builders would also hike the rates of the flats due to higher input costs while the buyers would have to shell more amount as stamp duty.

However, the question remains whether the buyers would really buy these properties, which have already reached exorbitant levels. “The problem here is of greed displayed by the builders. They have priced their properties beyond affordable levels,” said Ramesh Prabhu, a housing activist.

The Maharashtra Chambers of Housing Industry (MCHI) said consumers would be the worst sufferers.

“We would have no option but to pass the burden to the consumers,” said Sunil Mantri, president, MCHI, adding that they would lead a delegation to the revenue minister opposing such a hike.

However, builders rule out any change. “There are less sales and hence question of increase does not arise,” said Pujit Agarwal, CEO and managing director, Orbit Corporation Limited.

“Such hikes play a negative role in the whole concept of affordable housing,” said Baba Dalvi, owner, SG Dalvi and Associates, a leading architectural firm.