The affordability of economic housing projects in Pune is likely to take a hit as the Maharashtra government has increased the ready-reckoner rates, further hampering the growth of the real estate market, which is already complaining of sluggish sales.
A statement issued by the office of the inspector-general of stamp duty and registration stated the rates have increased after a gap of two years. For rural areas, the rate increase is 3.36 per cent, for nagar panchayat and municipal council it is 4.97 per cent, and for municipal corporations (except Mumbai) the rise is 5.95 per cent. In the state capital, the hike is 3.39 per cent.
Abhay Kele, president of the National Real Estate Development Council (Naredco), said the rise in ready-reckoner rates in rural areas can hit the affordability of the economic housing projects. “Most of the areas where construction for economic housing is going on are in the villages and thus their affordability would be hit post this rise,” he said.
Real estate associations had asked for a freeze on the rise in ready-reckoner rates given the already higher-than-expected rise in construction costs. The sector, most builders point out, has entered a stagnant phase with sales slowing down. This rise will deter many people who otherwise would have gone for investment, they add.
The Solapur municipal corporation has seen the highest rise of 10.17 per cent, while the Brihanmumbai Municipal Corporation has seen the lowest rise of 3.39 per cent. Pimpri-Chinchwad has seen a rise of 6.69 per cent while Pune Municipal Corporation has seen a rise of 4.16 per cent. The overall increase in ready-reckoner rates within municipal corporations is 5.95 per cent.
Ready-reckoner rates are determined by taking into consideration registered documents and also conducting physical surveys of the places. Before the rates are finalised, meetings are held with the stakeholders including realtors.
But the rate hike could affect affordable housing by raising upfront costs. Lloyd Mascarenhas of real estate consultancy firm ANAROCK Group said this would make housing less affordable to some lower income buyers. “The higher financial burden could push the overall cost of acquisition beyond such buyers’ reach, and may result in more fence-sitting. Affordable housing is sensitive to price changes, and this hike, coupled with steadily rising input costs for developers and additional levies, may dampen demand in this segment to some extent,” he said.
