Real estate stocks tumbled on Tuesday following the Maharashtra government's announcement of a 4.39% increase in the ready reckoner rate for the financial year 2026, effective April 1.
The Nifty Realty fell by 3.6%, significantly underperforming the Nifty 50, which was down 1.47%.
AB Real Estate shares fell 1.92% to Rs 1,922.25, Ajmera Realty & Infra India Ltd. stock dropped 1.96% to Rs 883.05, and Godrej Properties Ltd. declined 4.3% to Rs 2,038. Macrotech Developers Ltd. shares also declined 4.08% to Rs 1,147, and Oberoi Realty Ltd. stock fell 4.94% to Rs 1,556.5.
The increase in ready reckoner rates, also known as circle rates, will raise property valuations, leading to higher stamp duty and overall property costs for buyers. This adjustment, while moderate compared to the initially speculated 10% hike, has nonetheless impacted market sentiment.
Ashutosh Limaye of Anarock Group commented on the situation, noting that the 4-5% increase in urban areas is unlikely to make a significant difference in the housing market.
He anticipates a drop in new launches over the next few months and expects prices to plateau or increase only marginally in the next quarter. Limaye also mentioned that once equilibrium is reached within the luxury housing segment, developers will likely refocus on affordable housing.
The Maharashtra government's decision to hike the ready reckoner rate aims to ensure property transactions are not undervalued to evade taxes. These rates are used to calculate stamp duty and registration charges, impacting property costs directly. Despite the unchanged stamp duty percentages, the higher ready reckoner rates will result in increased expenses for property buyers.
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