Karnataka’s proposed guidance value hike may weigh on housing demand, impact the ₹1-2.5 crore segment

A proposed 10–15% increase in guidance values across parts of Karnataka is expected to temper homebuying sentiment, particularly in the ₹1–2.5 crore segment. Bengaluru, heavily dependent on the IT sector, is facing uncertainty amid a global demand slowdown, AI-led measures, and concerns about workforce restructuring. Experts said that while the hike may not halt housing demand, higher EMIs, rising acquisition costs, market volatility and job-security worries among salaried tech professionals could lead some buyers to delay purchases in the coming quarters. The Karnataka state government is mulling an increase in guidance value by at least 10-15% from April, 2026, sources in the Department of Stamps and Registration told Hindustan Times Real Estate. Also Read: AI-led job concerns or price fatigue? Why some Bengaluru techies are hitting the pause button on property investment What is a guidance value? Guidance value is the minimum value at which the sale of a property can be registered with the state government. It is also known as the circle rate in some states. The previous revision of guidance values in Karnataka was carried out in 2023. Before that, there had been a long gap, with the last significant increase implemented in 2018–19, when rates were raised by around 25%. “The guidance value is expected to increase by approximately 15% from April 1, 2026; however, the official notification from the government is still awaited. The previous revision, implemented in 2023, saw an increase of around 15%. Despite this, residential market activity remained resilient in the long term, with new launches and sales volumes in 2024 rising by approximately 10% and 12%, respectively, compared to 2023,” Vivek Rathi, National Director- Research, Knight Frank India said. In the near term, a fresh hike could exert some pressure on affordability and prompt developers to recalibrate pricing strategies. However, over the medium to long term, market dynamics will largely be shaped by demand–supply fundamentals and the broader macroeconomic environment, which will ultimately determine the trajectory of absorption and pricing, Rathi said. Also Read: 'Show me a site in Jayanagar for ₹5,000, I’ll buy': X post on Bengaluru property prices triggers backlash from locals Ritesh Mehta, Senior Director and Head, West and North, Residential Services and Developer Initiatives at JLL, said that periodic revisions in guidance values are structurally justified, as property market prices tend to rise over time and circle rates must eventually align with prevailing transaction values to prevent revenue shortfalls for the state. “Over the long term, increasing guidance values is a rational step because market values appreciate and governments need to correct the gap between notified rates and actual transaction prices,” Mehta said. Bengaluru remains heavily dependent on the IT sector, which is currently facing uncertainty Mehta also pointed out that Bengaluru and Hyderabad are heavily dependent on the IT sector as their primary growth engine. “The next couple of quarters will be important in determining how employment and income stability evolve,” he noted. According to him, while the guidance value hike may not halt home buying activity, it could weigh on buyer sentiment, particularly in the ₹1–2.5 crore segment, which is driven mainly by salaried IT professionals. Real estate experts said that this segment is already sensitive to higher EMIs and upfront acquisition costs. As IT stocks fall and market volatility reduces savings, some buyers may become more cautious. Worries about job security and steady income could lead them to delay home-buying decisions, even if long-term demand remains strong, they added.