Mumbai Metropolitan Region (MMR) has recorded sale of 7,929 housing units in October which is a 42% rise over the previous month boosted by stamp duty cut and the festive period of Navratri and Dussehara. The residential sector in Mumbai has recorded the highest ever registration in October over the last eight years. According to Knight Frank India, the registration in October 2020 jumped by 42% month on month and 36% year on year. However, it is noteworthy that this year, despite the pandemic impact, sales grew by almost a similar proportion.
According to the report, the state government’s move to reduce stamp duty to 2% from 5% between September 1 till December 31, 2020 and to 3% until March 31st has had an overall positive impact on the residential sector in Mumbai working in favour of homebuyers, developers as well as the government.
This apart, the Reserve Bank of India (RBI) cut the policy interest rates by over 120 bps in year-to-date (YTD) 2020. This reduction, coupled with humongous liquidity infusions by RBI, has helped banks bring down the home loan rates to historic lows which have helped augment the homebuyer’s loan eligibility by 10%.
Further, as the initial lockdown of 21 days in Mumbai extended to nearly 6 months in the form of partial lockdowns, families felt the need for larger apartments, thereby creating fresh demand for upgrades which may not have been a necessity earlier. Further, households whose incomes were not affected by the pandemic received a savings boost, as expenses relating to lifestyle, travel, vacations, dining out, entertainment and expenses on support staff, declined due to the extended lockdown. This also helped to improve their ability to make down payments.
Further, to bring homebuyers back into the market, many developers in Mumbai agreed to bear the incidence of stamp duty. In addition, developers continued to offer a host of indirect discounts such as floor rise waivers, deferred payment plans, assured rentals, GST waiver, cashbacks, EMI waivers, gifts, gold coins, free parking, etc. to bring down the price of apartments and entice homebuyers.
This upwards momentum in sales is likely to continue. As income streams return to normal, more homebuyers will try to close transactions in the next few months to benefit from the lower stamp duty rate, the report said.
Azlo Realty CEO Krish Raveshia said festive season coupled with pent-up demand has added to the overall cheer in sentiment. Many fence-sitters have taken the plunge. Commercial real estate too has managed to show positive momentum post unlock down phase.