Gurugram circle rate hike likely to price out low, mid-income buyers

Gurugram's second circle rate hike in eight months raises acquisition costs and stamp duties, with developers warning of pressure on mid-income housing demand

The 10-30 per cent increase in circle rates across Gurugram could price out prospective buyers in the low to mid-income segments, said developers and market watchers, with the hike being the second such since December 2024.

 

The sudden increase in circle rates could further dampen subdued demand in the real estate market, where a 67 per cent increase in property prices has been seen in the last two years to ₹16,186 per square foot in Q2 2025 from ₹9,718 per square foot in Q2 2023, according to Magicbricks.

 

“The extent of these hikes warrants careful consideration, especially in Gurugram, where property prices have already surged significantly in recent years. This upward trend has increasingly priced out low-to-mid income buyers and further increases in circle rates could escalate overall acquisition costs, placing an even greater financial strain on price-sensitive segments,” said Kartikeya Sharma, associate principal partner at Square Yards.

   

“The steep rise comes at a time when consumer sentiment has only just begun to improve, following the RBI's three consecutive rate cuts totaling 100 basis points. This move could temporarily slow down the growing interest among buyers,” cautioned Vineet Nanda, director Sales & Marketing at Krisumi Corporation, which has several projects spanning ₹2,000 crore worth of investments in Gurugram.

 

Last  week, the Haryana government approved revised circle rates, or the minimum cost below which land or property cannot be sold, effectively increasing stamp duties on registering sale deeds of immovable properties. According to the new rates which came into force from August 1, homes in the millennium city’s Haryana Shehri Vikas Pradhikaran (HSVP) sectors, private licensed colonies and other areas will see a 10 to 30 per cent hike in circle rates, which in turn

will increase the price of properties.

 

While the district administration had earlier proposed hikes up to 77 per cent in residential areas and 145 per cent for agricultural land, the final rate has been capped at 30 per cent for both. For example, the highest increase was suggested in the circle rate for agricultural land in Bajghera village off the Dwarka Expressway, at 145 per cent from ₹2.03 crore per acre to ₹5 crore per acre. The final rate, however, has only seen a 30 per cent rise at ₹2.64 crore per acre. 

 

Some developers said that the revising of circle rates was a necessary step, as it will align property valuations with market realities and enhance transparency in the sector. Signature Global founder and chairman Pradeep Aggarwal said that if implemented in a balanced manner, the move can enhance market transparency and improve buyer confidence by

aligning property valuations with ground realities.

 

Calling Gurugram a billionaire's playground, Rajjath Goel, managing director at MRG Group, said that luxury apartments priced above ₹5 crore selling out within days hardly surprises anyone here. “A rationalised circle rate framework will boost state revenues and ensure fairer benchmarking of land and property values,” he added.

 

The significant rise in property prices reflected strong demand for premium housing across Gurugram’s key micro-markets, including Dwarka Expressway, Golf Course Road Extension, Sohna Road and New Gurugram,

some developers noted. While the last revision was done in December last year, the proposed rates across these upscale markets is expected to rise by another 10 to 30 per cent when the new rates come into effect.

 

For example, the circle rates of flats in upscale colonies such as DLF Magnolias, Aralias and Camelias has been proposed to be increased from ₹37,750 per square feet to ₹39,325 per square feet. Similarly, the circle rate of floors in

licensed colonies by developers and HSVP sectors has been increased from ₹9,295 per square feet to ₹10,225 per square feet.

 

Vishesh Rawat, vice-president and head of marketing, sales and CRM at M2K Group added that the rate rise is unlikely to shake up luxury home demand. “While there might be a short-term price adjustment in some pockets, Gurugram’s overall luxury market remains on a strong, upward path,” he said.

 

Apart from Gurugram, the rise in circle rate is also expected to drive up overall costs in several other districts such as Panchkula, Faridabad and Sonipat due to their proximity to either Delhi or Chandigarh.