- By Aditya Pratap Singh
- Mon, 19 Feb 2024 10:05 PM (IST)
- Source:JND
The real estate market in India is growing rapidly. Every city, be it a metro city or a tier II or tier III city, is witnessing a sharp hike in purchaing and selling homes, apartments, and lands. Amid all these buying and selling, almost everyone who transacts a property often comes across the term 'circle rate'. In order to understand the real value of the property you need to understand the difference between circle rate and market value.
What is circle rate?
Circle rates are often set by local authorities, which is the minimum price at which a property, whether commercial, residential or lands should be sale. The metric is as a regulator to control property prices. District administrations are tasked with setting standard rates for properties across states and cities. The circle rate varies according to locations. As per laws transactions below the circle rate are generally not registered.
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Additionally, the circle rate affects the transfer of ownership of the property by determininging the location of the property within the state and city. The circle rates are different for developed area and less developemt area.
What is Market rate?
Market rate, on the other hand, reflects the actual price at which the builder sells the property. Market rate is influenced by factors like size, service and location of the property, which includes home, apartments or commercial stablishment. Generally the market rate is higher than the circle rate.
Being a property buyer, we need to aware of the fact that properties are generally not transact at circle rates. Market rate shows the value appreciation of any area in the real estate sector.
Difference between market rates and circle rates
The circle rate acts as a regulatory benchmark for property transactions, whereas the market rate reflects the various factors, which affect the value and the true selling price. It plays a vital role for potential buyers in effectively navigating the real estate market and taking the right decision regarding property investment.
