How Price Rise In Jantri Will Affect Real Estate - Exclusive Insights By Chitrak Shah

Everyone’s talking about the new Jantri rates in real estate. With prices set to rise, property deals are about to get more expensive.

But the main question is:

What is Jantri?

The government determines a base price, referred to as Jantri, which sets the minimum price at which property transactions ('dastavej') can be registered.

This base price accounts for fluctuations in market prices, providing a standardized reference point for property valuations.

How Will the New Jantri Impact Real Estate?

1. Land Transactions

For land held for long-term investment or trade, the impact of the new Jantri is expected to be limited. However, buyers and sellers will need to rely more on cheque payments since cash transactions are common in such deals. The biggest challenge lies in premiums, as higher area costs will now be included in calculations.

2. Real Estate Developers

Developers buying land with Floor Space Index (FSI) will face a significant rise in costs under the new Jantri rates. If the government separates FSI from Jantri calculations, the impact could be easier to manage. However, most additional costs are likely to be passed on to buyers. The extent of this impact will vary by area, with price increases ranging between 25% and 40%, depending on specific cases.

How Much Will Flat Prices Increase?

• Existing Flats: These are unlikely to see price hikes since their costs have already been accounted for.
• New Flats: Prices may rise by about 10%. For projects where land is yet to be purchased, higher premiums will be added. If FSI rates also increase, total costs could go up by 30%–40%.

Will Flats Become More Expensive?

Yes, the price of flats could rise significantly, with costs potentially increasing by up to ?10 lakh per unit.

What About Properties Without Registered 'Dastavej'?

Such properties will also be affected. However, for fully valued flats where the Jantri rate is lower, the impact will be minimal.

Who Will Be Most Affected?

The effect will depend on the average deal price in a given area.

• Mid-Range Pricing: Ideally, Jantri rates should reflect the middle range of property deals, which depend on factors like location, plot type, demand, and buyer behavior.
• Luxury Properties: Segregating luxury housing at the top tier could make Jantri rates more accurate.
• Middle-Class Buyers: Average deals could make pricing fairer for this segment.

However, areas with high demand and limited supply may still see price increases.

Suggestions to Reduce the Impact

• Keeping FSI rates stable can ease the burden for both developers and buyers.
• Lowering stamp duty could also help offset some of the additional costs.
• Separating affordable housing from luxury projects could protect each segment from excessive rate hikes.

Should You Buy Property Before the New Jantri Takes Effect?

Yes, it is advisable to make purchases before the new rates are implemented, as the revised Jantri will lead to higher property costs across the board.