Top Real estate companies in Hyderabad do keep in mind the reduction guidance value when it comes to selling property. Top 10 real estate companies in Hyderabad also keep reduced value.

Major changes that are taking place in the Indian housing sector over the last five years, is that the latest data points towards a reduced difference between the ready reckoning rates (RRR) and the actual market prices in the primary (sale by the developer) segment in popular cities. Top real estate companies in Hyderabad do keep this in mind while doing business.

Ready reckoner rates which are also known as circle rates or guidance values happen to be the minimum values set by a state government below which a property cannot be registered. Each area within a city happens to have its RR rate on which stamp duty is calculated. To align circle rates with the actual market prices, most state governments have been able to regularly reviewed and increased the RR rates in cities either y-o-y or in about two years. Yet, market values increased only marginally in the given period. 

How does the reduced gap help?

 The best advantage of this reduced gap is that it discourages ‘black money’ transactions. The primary sales market in tier I cities as of now does offer limited scope for unaccounted cash infusions as the minimal gap between the state-notified circle rates as well as the market value quoted by developers in such regions. Top 10 real estate companies in Hyderabad do keep this issue in mind about the reduced gap.

In the last five years, most state authorities regularly increased the RR / circle rates in cities to align them with market values. 


Mumbai has rather seen a significantly reduced gap between market value and RR rates over the last five years.There are no doubt certain localities where the difference between the two rates do remain as high as 58%. This may be due to the ultra-luxury specifications in some projects. Top real estate companies in Hyderabad do portray a scenario like that of Mumbai.

                                                       Reducing Guidance Value Will Bring Down Property Prices


In Pune, the areas considered for analysis do include Balewadi, Dhanori, Baner, Kharadi, and Erandwane. Past five years, the gap between the RR rates and market value in these localities has come down considerably. 


Compared to other top cities, Noida did see a reduction. Top real estate companies in Hyderabad do highlight this issue of reduction.


In contrast to trends in Noida, the gap between the two rates did narrow in the last four years. Sohna Road saw the gap reduce to 35% in 2020 as against 38% early in 2016. 


In Bangalore also, the difference between guidance value (as it is called here) and market values has shrunk over the years. In Rajaji nagar, for instance, the gap is presently at 48% as against 91% back in 2015. 

On the whole few taxpayers will be deducting their state and local property taxes so they remain untouched. So they may prefer to buy a house, pushing up demand and keeping prices high. Only high taxpayers in states with both high income and property taxes can feel a pinch from losing mortgage deductions.

Secondly, housing prices do go downwards. Homeowners are usually are prone to overvalue their house and are reluctant to lower the asking price until faced with continuing bad news of now no offers.

Third, buyers, especially higher-income consumers, are wealthier due to windfall tax breaks and lower rates. They would like to buy better houses. 

It is quite evident that housing prices favor the rich over the middle class and below. House prices for higher-income families tend to go up. Middle-class families have stagnant incomes out of the housing market and also tend to put upward pressure on rents.

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