Higher Property Valuations Impact Market, Stocks Of Major Developers Fall By 3.6%

Mumbai: Real estate stocks faced a sharp decline on Tuesday following the Maharashtra government's announcement of a 4.39 per cent increase in the ready reckoner rate for the financial year 2026, effective from April 1. This hike led to a significant drop in the Nifty Realty index, which fell by 3.6 per cent, underperforming the Nifty 50’s decline of 1.47 per cent.

Stocks Hit Hard

Major real estate companies saw their shares tumble. AB Real Estate shares dropped 1.92 per cent to Rs 1,922.25, Ajmera Realty & Infra India Ltd. fell 1.96 per cent to Rs 883.05, and Godrej Properties Ltd. saw a decline of 4.3 per cent to Rs 2,038. Macrotech Developers Ltd. shares also fell 4.08 per cent to Rs 1,147, while Oberoi Realty Ltd. saw the steepest drop at 4.94 per cent, closing at Rs 1,556.50.

Why the Hike Matters?

The ready reckoner rate, also known as circle rate, determines the minimum value of properties for stamp duty and registration charges. The recent increase will raise property valuations, leading to higher stamp duty costs and making properties more expensive for buyers.

Expert Views on Market Impact

Ashutosh Limaye from Anarock Group stated that the 4-5 per cent increase in urban areas is unlikely to significantly affect the housing market. He predicts a decrease in new property launches over the next few months, with prices stabilizing or rising only slightly in the next quarter. Limaye also suggested that once the luxury housing segment reaches equilibrium, developers will shift their focus back to affordable housing.

Government’s Intent Behind the Hike

The Maharashtra government’s decision aims to prevent property transactions from being undervalued to evade taxes. Although the stamp duty rates remain unchanged, the higher ready reckoner rates will directly increase the overall costs for property buyers.