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Back on 26th August 2020, the Maharashtra Government had come to the decision to reduce stamp duty to 2% in the view of the declining sales and the crisis posed by the lockdown to the real estate sector. This has evidently proved fruitful, as housing sales in Mumbai during November 2020 were 63% higher than that during November 2019. With 9301 residential units sold during this month, the year-on-year rise is certainly quite impressive.
The real estate sector in Mumbai also recorded a 17% month-on-month rise in property sales in November 2020. It followed the 42% MoM increase in sales in October and a 112% MoM growth in September. The massive growth in September took place as the sales started to revive after a period of complete lockdown due to the pandemic. The housing sales recorded in November 2020 is also the highest in the month of November in the last nine years.
The reduction in sales duty has certainly been a major catalyst as it made properties much cheaper. Many of the fence sitters, who had for the last few years waiting for an opportune moment to buy a home, finally saw their chance. Considering the jump in housing sales, it is evident that they made the most of the stamp duty cut. The sales were further augmented by the festive season, which is considered to be an auspicious time to buy a home. Moreover, RBI reduced the repo rates to the lowest in several years, which resulted in lower home loan interests.
After a long period of stagnancy and credit crunch in the real estate market, the situation had just started to improve when the pandemic struck. Naturally, this made the developers desperate to boost their property sales. Many of them came up with additional perks to entice potential buyers. These include negotiable prices, indirect discounts, deferred payments and more.
Cumulative sales of 22,827 residential units have been recorded from September to November. The healthy growth of the real estate sector is expected to continue, thanks to the initiatives by the government and the RBI. Several issues that the builders were facing at the beginning of the pandemic are now getting resolved. For example, the biggest problem in the real estate sector was declining sales in recent years. During the lockdown, the market almost came to a standstill as potential homebuyers went into financial problems and had to postpone their plans. Now with income levels returning back to normalcy, more and more people are starting to buy new homes. For the realty sector in Mumbai, this naturally signals a bright future ahead
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