Buildings, Construction, Development, GST, Property, Ready Recokner Rates, Real Estate, Real Estate Agent, Real Estate Buyers, Real Estate Developers, Real Estate India, Real Estate Investment, Real Estate Mumbai, Real Estate News, RERA
The Realty Sector in Mumbai is witnessing its worst slump ever, with market rates of properties in several areas, including south Mumbai, dipping below the ready reckoner rates which are values of properties, determined by the government for payment of stamp duty. These rates, published annually, impact the construction cost of projects, as several premiums and charges collected by the civic bodies and the government itself are linked to the ready reckoner values. According to sources, many prominent developers and industry watchers have stated that never in the history of the city have they witnessed such a phenomenon, even as debt-laden builders, struggling with slow sales, unsold apartments, and delayed/stalled projects, are pulling out all stops to attract buyers. According to a recent research report, the market rates of residential properties in Colaba (Shahid Bhagat Singh Road) is around Rs 40,000 per sq ft, while the ready reckoner rates for the same properties is at least Rs 10,000 more. Similarly, the market rates of residential properties in Dadar West is around 30,000 per sq ft, whereas the ready reckoner rates in the area are pegged at Rs 40,000 to Rs 45,000 per sq ft. In parts of Powai, the current ready reckoner rate is Rs 27,000 per sq ft while flats are being offered for Rs 25,000 per sq ft or less. The report further reveals that since 2015 when the market was sluggish but wasn’t facing such complete slump, the ready reckoner rates have gone up by around Rs 2,000 to Rs 5,000 per sq ft in many parts of Mumbai, whereas the market prices have remained the same or worse, dropped by Rs 3,000 to Rs 4,000 per sq ft. Does this mean that the government has been increasing ready reckoner rates by around 15% per year and that the market prices have remained flat? Shouldn’t Ready reckoner be the true barometer of real estate prices? How could we treat it as a revenue machine? The NAREDCO, an autonomous regulatory body affiliated to the Ministry of Housing and Urban Affairs, has affirmed there is a discrepancy between the market prices and the ready reckoner rates, saying the change has come about with the introduction of Real Estate Regulatory Authority (RERA), wherein the carpet area of a property has been defined. Developers are now selling properties at carpet area. As a result, areas such as Colaba, Bandra, Santacruz, and Thane are witnessing higher ready reckoner rates compared to the actual market price. So is this the chance for the buyers to cash in on opportunity to make investment, particularly when the Developers are offering slew of incentives to them?