Gurugram Circle Rate Hike May Price Out Low to Mid-Income Buyers Amid Subdued Demand

The proposed 10-30% hike in Gurugram's circle rates may price out low to mid-income buyers, said developers and market watchers. The second rate hike since December 2024 comes amid subdued housing demand, with property prices already rising 67% in two years. Developers warn that the hike could hurt buyer sentiment just as it was recovering. The revised circle rates will increase stamp duties on property transactions, with some seeing the revision as a step towards aligning valuations with market trends.

Gurugram's real estate market is set to face another significant change with the proposed 10-30% hike in circle rates, the second such increase in eight months. The move, which comes amid subdued housing demand, has sparked concerns among developers and market watchers who warn that it may price out low to mid-income buyers. The proposed hike is expected to take effect from August 1, 2025, and will increase stamp duties on property transactions.

The circle rates, which are the minimum valuation for property registration, have been revised to reflect current market realities. According to the Haryana government, the last revision took place on December 1, 2024, when rates were raised by 10% to 30% across various localities. The new rates will be implemented across HSVP sectors, private licensed colonies, and other areas in Gurugram [1].

The proposed hike could have a significant impact on housing demand, particularly for low to mid-income buyers. Property prices in Gurugram have already risen by 67% in two years, from ₹9,718 per square foot in Q2 2023 to ₹16,186 in Q2 2025. The further increase in circle rates could escalate acquisition costs, putting additional financial strain on price-sensitive segments [2].

Developers have expressed concern that the hike could hurt buyer sentiment just as it was recovering. The steep rise comes at a time when consumer sentiment has only just begun to improve following the Reserve Bank of India's (RBI) three consecutive rate cuts totaling 100 basis points. Vineet Nanda, director of sales and marketing at Krisumi Corporation, warned that the hike could negatively impact buyer sentiment [2].

Some developers see the revision as a step towards aligning valuations with market trends. Pradeep Aggarwal, chairman of Signature Global, believes that if implemented in a balanced manner, the move can improve transparency and buyer confidence [2]. However, Rajjath Goel, managing director at MRG Group, noted that luxury apartments priced above ₹5 crore are selling out within days, suggesting that the hike is unlikely to affect luxury housing demand in key micro-markets [2].

While the hike may increase state revenues and benchmark property values more fairly, it could also lead to a decrease in overall housing demand. The extent of these hikes warrants careful consideration, especially in Gurugram, where property prices have already surged significantly. Experts recommend that the government should be cautious and avoid major hikes to prevent market disruption [1].

The proposed hike is set to affect various residential plots and flats in Gurugram. For instance, the circle rate of plots in major colonies in Wazirabad tehsil, such as Garden Estate, has been proposed to be increased from ₹90,000 per square yard (psy) to ₹1,03,500 psy. In Mayfield Garden, the rate has been revised from ₹80,500 psy to ₹92,000 psy. Similarly, the circle rate of residential plots in DLF phase 1 to 5 is proposed to be hiked between 10 percent and 15 percent [1].

In conclusion, the proposed circle rate hike in Gurugram has the potential to significantly impact the housing market, particularly for low to mid-income buyers. While the revision aims to align valuations with market trends, the extent of the hike and its potential impact on housing demand remain a subject of debate among developers and market watchers. As the implementation date approaches, it will be crucial to monitor the market's response and assess the long-term effects of the hike.

References:
[1] https://www.hindustantimes.com/real-estate/gurugram-proposes-circle-rate-hike-real-estate-experts-warn-of-impact-on-housing-sales-call-for-infra-upgrades-101754047834252.html
[2] https://www.business-standard.com/industry/news/gurugram-circle-rate-hike-august-2025-impact-real-estate-demand-125080300292_1.html