Maharashtra developers see spurt in homebuyers after duty cut

The Maharashtra government’s move to cut stamp duty on property registration for a limited period has started yielding results as developers see a large number of homebuyers coming back to the market. Residential property sales in Mumbai and Pune are witnessing some recovery with an increase in sales seen during September. Developers are witnessing a renewed interest in their existing projects, and are lining up new launches in the Pune market to meet the demand.

Ashish R Puravankara, MD, Puravankara, says he is buoyant about the Pune realty market and is ready to launch new projects here.  The reduction of the stamp duty in the region and Friday’s RBI decision to reduce risk on home loans, while the existing home loan rates are at the lowest in a decade, makes it a favourable time for homebuyers planning to invest, says Purvankara.

“We have already launched one million sqft and our next project, Emerald Bay in Mundhwa of around 0.77 million sq ft, will have a total of 611 units, out of which we will soon be launching 280 units for sale,” Purvankara said. Shapoorji Pallonji Group’s affordable housing brand Joyville has launched a project of 600 apartments in Pune at Shewalewadi.

Sriram Mahadevan, MD, Joyville Shapoorji Housing, said there exists demand in Pune for quality homes from trusted brands. Joyville’s first project in Pune at Hinjewadi launched in 2018 has been sold out. Vishal Gokhale, CMD, Gokhale Constructions, said looking at the number of walk-in customers and confirmed bookings, he predicts the Navaratri festival to be a good buying season something he was a bit sceptical about considering the pandemic situation.

“We are delighted to see the enthusiasm among home buyers who have already started visiting our office to check out the Navratri offers, and bookings of flats has started way before the Navratri campaign,” says Gokhale. “We are looking forward to a good movement in sales of residential spaces. This season will be as good as the last year’s for us with almost no impact of the current situation,” says Gokhale.  Real estate consultancies are linking the renewed intrust in Mumbai and Pune to the cut in stamp duty. “Homebuyers are responding to the strong stimulus of reduction of stamp duty from 12% to 5% and it has led to a significant fillip to sales,” Shishir Baijal, CMD, Knight Frank India, said.

The Mumbai realty market has seen a strong homebuyer response with sales going up to Rs 9,000 crore in September ’20 from Rs 3,500 crore in August ’20 crore and Rs 3,100 crore in June ’20, Baijal said. “The cut has not affected revenues for the Maharashtra state government as housing registrations have seen a jump in volumes and compensated for the cut in duty,” Baijal said.  Other states should follow Maharashtra and provide similar stimulus to the realty sector, Baijal said.

Anuj Puri, chairman – Anarock Property Consultants, says there has been a 7-10% increase in serious enquiries finally leading to sales post the stamp duty reduction. “This is very likely to increase over the next couple of months. Buyers are aware that this facility comes with a deadline, but the available period covers the festive season,” Puri said. Suhas Merchant, president, CREDAI Pune, says properties which are at completion stage or are completed are now selling as there is a stamp duty concession for three months and there is no GST. Enquries are also coming in the large luxury apartment segment but properties which do not have infrastructure around are not selling, Merchant said.

Once the existing stock is consumed, Merchant expects price of the fresh stock to go up by 20% because labour and material costs are going up while the Covid situation is bringing down output and efficiency.Public transport has not re-started in Mumbai and Pune. Once that is resumed, real estate consultancies expect a further improvement in these two cities.