In 2017, real estate sales in Pune fell by 6 per cent. File Photo
THE state government’s decision to keep Ready Reckoner (RR) rates unchanged for the current financial year has been welcomed by the real estate sector. However, the industry does not feel that this will result in a price correction in the sector, a demand made by many citizens’ groups.
The move should, at the very least, keep property prices stable, said Sudhakar Velankar of the Grahak Panchayat, a group representing consumers. “There should be no rise in property prices,” he said.
Shashank Paranjape, managing director of Paranjape Schemes, a real estate firm, also ruled out any possibility of reduction in property prices. Prices have already gone down, while input costs of material such as steel and cement have gone up, he said. “… Any cost correction can be ruled out,” he said.
The real estate industry had urged the state government to keep Ready Reckoner rates constant as, they said, the sector was “reeling under low sales.” Last year, real estate sales in Pune fell by 6 per cent, as market sentiments remained subdued.
As the sector grapples with unsold inventory, some builders have started giving indirect concessions to buyers. “It depends on the bargaining power of the end customer… if he is able to bargain well, concessions are given,” said an industry analyst.
Paramvir Singh Paul, branch director of real estate consultancy firm Knight Frank, said the state government’s decision to keep RR rates unchanged was meant to ensure that demand does not dip further. Real estate analyst Niranjan Kelshikar pointed out that the burden of GST and other taxes had to be borne by buyers and builders couldn’t “reduce what was not in their hands”.
Realtor Niranjan Kelshikar said while the decision to not hike RR rates wouldn’t have any real impact towards ‘reducing property rates’, the decision shows that even the state government has conceded that the realty sector is going through a bad phase.
“For the last four years, CREDAI has been requesting the state government not to positively revise the RR rates, however, this is the first time they have listened to us. This is symptomatic of how bad the real estate market is. The situation is also affecting the earnings of the government as tax collection has dwindled over last two to three years,” said Kelshikar.