The decision taken by the Maharashtra government in September 2020 to slash stamp duty on residential properties from 5 per cent to 2 per cent has given a big boost to property sales in the Mumbai Metropolitan Region (MMR), including luxury and affordable segments, an industry study released on Monday said.
The year 2021 witnessed a sale of 2,42,000 units (homes) -- a sharp increase of 53 per cent compared to 2020, and a 20 per cent jump over 2019, said the research report by CREDAI-MCHI, Colliers and CRE Matrix.
The state's move, coupled with reduced home loan rates, nearly stable prices and other factors have proved a boon for the realty industry in the past 15 months, said the study.
CREDAI-MCHI Incoming President Boman Irani said that a series of positive actions by Maharashtra government ensured that the realty sector and the overall economy got a boost, doubling the number of flats sold.
"Residential flats worth around Rs 1.30 lakh crore were sold between October 2020 and March 2021, in turn leading to an indirect collection of GST, of which the state received 9 per cent on the construction costs and another 2.5 per cent on the apartments' value," said Irani, terming it as a win-win situation for all.
He said the rationalisation of charges/taxes is resulting in total growth and the overall services and employment industry will also benefit from this spillover effect.
As per the report, Central Mumbai comprising Dadar-Lower Parel-Worli-Sewri-Mahim-Matunga-Parel-Wadala saw the highest revival in 2021 with registrations rising 93 per cent from 2019 and 71 per cent as compared to 2020.
Adjoining Thane accounted for the highest number of registrations with 42 per cent share, and highest stamp duty collection, said the report.
"The MMR residential market has shown a revival. New launches also rose 3 per cent in 2021 as developers launched projects to avail the discount premium while the market was on an uptick," said Colliers CEO and Managing Director, Ramesh Nair.
He said if the demand persists in a similar trend led by the huge propensity to purchase, the market will experience a better demand-supply equilibrium this year, with overall 2-5 per cent increase in prices in the latter half of 2022.
The state government's collections swelled on spurring sales despite rate cuts and discounts leading to 81 per cent higher stamp duty collections YoY, almost touching 2019 levels.
It benefitted even the BrihanMumbai Municipal Corporation (BMC) which collected premiums worth over Rs 11,000 crore by December 2021, compared to its average collection of Rs 3,500-4,000 crore in the past 10 years.
Simultaneously, in 2020-2021, property tax collections hit a 10-year high -- Rs 5,135 crore or 98 per cent of the targets -- which is the second biggest source of BMC's revenues after GST.
Affordable housing and lower-mid segments sales also saw a fillip with registrations in 2021, up by 22 per cent compared to 2019, and accounting for 39 per cent of the total sales, with deals mainly in Thane, followed by the Western suburbs.
The demand for the luxury housing segment -- for residential properties worth more than Rs 3 crore -- returned after several years with sales doubling in 2021 compared to 2019, and accounting for the highest share of 28 per cent in the past three years, with pickups in Central Mumbai and Western suburbs, said the research report.
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