Apartment costs in Bengaluru have jumped by 10-20 percent, with the outskirts witnessing the maximum hike, after the increase in guidance value by the state government on October 1.
Guidance value is the minimum value at which the sale of a property can be registered with the state government. It is known as circle rate in some states.
Local brokers in Bengaluru say suburban areas like Yelahanka, Electronic City and KR Puram are witnessing maximum hike in apartment prices.
On October 1, the state government revised the guidance value by 20-30 percent in the state. On an average, the increase will be 20-30 percent. Depending on the area, it may go up to 50 percent in dense IT corridors, Revenue Minister Krishna Byre Gowda had said.
Currently, an apartment in Yelahanka in the north is priced at Rs 11,500 per sq ft from Rs 7,000 per sq ft before. Electronic City in the south is selling at Rs 10,000 per sq ft from Rs 7,000 per sq ft before. And in KR Puram, apartment costs have jumped by Rs 500-1000 per sq ft from Rs 5,500 per sq ft.
However, the prime areas see little difference in property prices, as the capital values of apartments were already 200-400 percent higher than the previous guidance values, officials at Karnataka Stamps and Registration Department said.
In a 5-km radius of MG Road, property prices are at Rs 12,000-30,000 per sq ft, depending on the location. The prices increased the most in Lavelle Road, one of the prime areas in the CBD area, to Rs 20,000-22,000 per sq ft from Rs 18,000 per sq ft before. Indiranagar saw a minimum hike in property prices, touching Rs 10,000-20,000 per sq ft.
Why do outskirts feel the brunt?
In most prime locations, or CBD areas, the difference between the guidance value and actual property prices was about 40-50 percent, while in the outskirts, it stood about 30 percent, local brokers say.
Real-estate brokers in the city say property values are already sky-high. "In most places, the guidance value was already less than 40 percent of the market value. Thus, an increase in the circle rates will bridge the gap in prices in prime locations, while the outskirts will see a major increase," Sunil Singh, Director, RealtyCorps, said.
The increased guidance value is also expected to dent the affordability in some areas. "This will mostly affect those who are looking to buy mid- and lower-end budget homes. A 14 percent hike will increase their costs by Rs 50,000 to Rs 1 lakh," Singh added.
The state government last increased the guidance value four years back but had reduced the same during COVID-19. One of the major reasons for the increase, according to the revenue minister, is to bridge the anomalies between the real estate capital values and the guidance values.
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