Maharashtra CM Eknath Shinde was speaking on making Mumbai a slum-free city with affordable housing, when he promised to consider stamp duty reduction. The deputy CM Devendra Fadnavis also assured the real estate sector about duty cuts and premium discounts later last month. But it a slum-free city looks like an uphill task when 3.4 lakh units of Mumbai’s real estate lie unsold, while more than 65 per cent of its 12 million residents live in slums.
A breakdown of factors affecting sales. |
Stamp duty weighing down purchase power?
According to numbers from real estate data analytics platform Liases Foras, property registration in the maximum city went down by 10 per cent in the July-September quarter of FY23. The number of unsold housing reached 3.4 lakh by September end, because higher input costs and rising sales during a post-pandemic revival, made developers increase prices. The affordability of new homes in Mumbai has also been affected by the restoration of stamp duty to 5 per cent, after it had been reduced to 2 per cent during the pandemic.
EMIs and demand add pressure
Rising interest rates on homeloans, driven by RBI’s repo rate hikes amid inflation, has also made EMIs costlier by 8-9 per cent. Added pressure on homebuyers comes from a 1 per cent metro cess in major cities of Maharashtra, which takes Mumbai’s stamp duty to 6 per cent. Since the government extended discounts on the part of a plot which can be used for constructions, developers have launched more projects, while the demand didn’t surge at the same pace.
Festival provided some respite
On the other hand October managed to deliver one lakh registrations and a record stamp dirty collection for the city, but that could be attributed to the festive cheer. There has been a slowdown in sales across Tier-1 cities of India, and although sales in Mumbai Metropolitan Region were high for July-September, they were down in Panvel, Thane and Dahisar.