Costs of housing in Bengaluru have increased by between 10 and 20 percent, and the suburbs are experiencing the highest increase following the rise in the guidance value given that was announced by the State government on the 1st of October.

The Guidance value is the minimum amount at when the sale of a property can be recorded at the local government. It is also known as a circle rate in some states.

Local realtors located in Bengaluru claim that areas in the suburbs, such as Yelahanka, Electronic City, and KR Puram, are experiencing the highest price increases for apartments.

On the 1st of October, The state government changed the guidance level by 20-30 percent across the state. On average, the change is between 20 and 30 percent. Based on the location and the location, it could go as high as 50 percent in the most dense IT corridors, the Finance Minister Krishna Byre Gowda had said.

At present, a house located in Yelahanka located in north India is listed at Rs 11,500 per sq ft as opposed to an average of Rs 7,000 prior. Electronic City in the south is priced at 11,000 per sq ft, up from 7,700 per sq ft earlier. In KR Puram, apartment costs have increased by between Rs 500 and 1000 per sq ft. This is up from 5,500 per square foot.

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However, the most desirable areas have little to no change in the prices of property since the value of apartments was 200-400 percent higher than the prior estimates, officials from Karnataka Stamps and Registration Department declared.

In the 5-km area within the 5-km radius of MG Road, property costs are between $12,000 to $30,500 per square foot, according to the site. The highest price was seen at Lavelle Road, one of the most sought-after areas within the CBD area, and is now at Rs 22,000-22,000 per square foot from the previous rate of Rs 18,000 per sq ft. Indiranagar witnessed a minimal increase in prices for property, reaching between Rs 10,000 and 20,000 per sq feet.

Why do the outskirts take the most?

In the majority of top areas in the prime or CBD zones, the gap between the guideline value and the actual price was between 40 and 50 percent, and in the suburbs, it was about 30 %, according to local agents’ reports.

Real estate brokers in the city claim that the property prices are already sky-high. “In most places, the guidance value was already less than 40 percent of the market value. Thus, an increase in the circle rates will bridge the gap in prices in prime locations, while the outskirts will see a major increase,” Sunil Singh, Director of RealtyCorps, stated.

The increase in the estimation value is also likely to lower the affordability of certain regions. “This will mostly affect those who are looking to buy mid- and lower-end budget homes. A 14 percent hike will increase their costs by Rs 50,000 to Rs 1 lakh,” Singh said.

The state government had last raised the value of guidance four years ago but decreased the value during COVID-19. One of the primary motives for the increase in the words of the Revenue Minister is to fix the asymmetry between the capital value and the guidelines values.