Pune: Negative Impact On The Home Buyers By Extraordinary Increase In Ready Recknor Rates : Suhas Merchant, President – CREDAI Pune Metro

Pune, September 12, 2020: It is surprising to note the extraordinary increase in the Ready Recknor rates for F.Y. 2020-21 announced by the Govt. of Maharashtra, which will create negative impact on the home buyers as it has nullified the impact of concession given in the stamp duty rates though for limited period said Mr. Suhas Merchant , the President of CREDAI-Pune Metro

The Real Estate Sector is facing a sluggish market for the last 3 to 4 years, in addition to this, during the unprecedented COVID pandemic period, almost more than 120 days the activities were at grinding halt which has worsened the situation.

The sector is a growth engine and contributes substantially to the GDP of the country by creating wealth and employment, and requires support to survive and revive. Considering this fact the Government has not revised the ready recknor rates during the last two years.  Since there is no improvement in the situation, the sector needs a booster rather than such uncalled for upward revision. The increase is adhoc and has no scientific base.
The CREDAI Pune Metro President, strongly protested such steep revision in the Ready Recknor rates, which will have a negative impact on the economy as a whole. Though the Govt. claims that the average increase in only 1.74 % which is misleading to the public. It can be seen from the following table, in certain cases, the increase is as high as 10%.

Table of Increase in RR Values Sept. 2020

Area – Prabhat Road /   Zone –  18/326 /  Land Rate increase –  10%  /  Residential Premises –  8%

Area – Dhankawadi /   Zone –  23/389 /  Land Rate increase –  8%   /  Residential Premises –  10%

Area – Ghorpadi /   Zone –  32/491 /  Land Rate increase –   /  Residential Premises –  10%

Area – Baner /   Zone –  39/567     /  Land Rate increase – 8%  /  Residential Premises –  10%

Having gone through the new ASR rates, following are the observations for PMC areas by Mr. AshwinTrimal, Managing Committee member of CREDAI-Pune Metro

1. Rates of residential properties have increased across the board in developing areas (all peripheral areas, including 23 villages merged recently etc.)

2. Rates in old city limits are untouched which can be termed as developed areas, since there is not much development and hence no sale happening in those areas.

3. Rates of land have been brought down in some cases though there is no specific trend. Eg, in a single village, rates have changed inconsistently across survey numbers or surrounding areas.

4. In many areas, rates of shops and commercial offices have been reduced. This may be because not many offices exist in most of these areas. The department uses such instances to show reduction of rates. They have no impact on end users because no transactions happened in these categories anyways.

5. Areas where Prime Minister Awas Yojana(PMAY) is being implemented, and flats are being purchased with subsidy from the Government, rates are increased. Now, it will be more stressful for needy people to purchase such flats.

Ashwin Trimal feels this increase will pinch flat buyers more than anyone else because wherever there is a possibility of flats being developed, rates have been increased. It looks illogical in some cases also, because the rates of land have not increased in proportion to rates of flats. Hence we can broadly conclude the Government is trying to nullify the benefits given to home buyers by reduction in the stamp duty, by this increase.

Just 10 days back, when Stamp duty was reduced by 3%, we thought that the Authority realized the need to give some boost to the Real Estate Sector. Today, we feel that this so-called boost is lost.

The CREDAI-Pune Metro demands the withdrawal of the revision made in the ready recknor rates, which is defeating the purpose of extending the concession to the home buyers in the stamp duty to revive the Real Estate market.