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Mumbai’s branded and luxury housing segment reaped most of the benefits after the state announced a reduction in stamp duty. Between January and March 2021, the low interest rates and stamp duties significantly benefited this segment as per available statistics. However, during the second wave of the pandemic and consequent lockdown, the sales of homes underwent a steep drop. Besides, the stamp duty was raised to 5% from April 2021. All these adverse factors affected the sales of apartments.
An analysis reveals that the best selling real estate projects in the mentioned period in Mumbai include some from the reputed luxury brands. Among these, Oberoi Realty deserves a mention, which sold multiple properties. Some of the other developers who benefited during this span include Rajesh Lifespaces and Indiabulls Real Estate. All these developers registered a record sale of luxury projects in terms of price and volume. Some of the other project builders such as Piramal Realty also reported healthy sales figures.
It was in the second half of 2020 that the government of Maharashtra decided to reduce the stamp duty to 2% to 3% for residential apartments. Given that the country was under partial lockdown during that period, investors were lacking the drive as well as purchasing power. Considering the low transaction costs as a result of reduced stamp duty, property buyers started investing in real estate. This healthy trend continued till March 2021. During this time, the residential real estate sector witnessed a major boost, with an increment in the number of sales.
It should be mentioned that the luxury housing industry suffered a blockade after the pandemic kicked in. Given that this sector brings homes priced mostly above INR 50 lakhs, the 5% stamp duty would add significantly to the transaction costs. This prevented homeowners standing on the borderline from investing in real estate. However, when the provision for reduced stamp duty was withdrawn in April 2021, investors stopped channelizing their funds significantly. This time also clashed with the onset of the second wave of the pandemic. Altogether, the real estate sector suffered a blow which reduced the sales of luxury homes. Even the affordable housing sector suffered April 2021 onwards due to the plethora of conditions. The demand for these homes is likely to resume once the government comes up with the reduced stamp duty provision once again.
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