The last two quarters of FY 21 charted strong sales growth for residential sales in Maharashtra, influenced by a cut in stamp duty rate, low home loan interest rates and with developers offering lucrative deals to navigate sales.
The discontinuation of the stamp duty rate cut from April 01, 2021 and the imposition of the curfew/lockdown like situation across the state due to the second wave of the pandemic might have an adverse impact on residential sales, disrupting onsite construction activities and drastically reducing the number of customers site visits for project finalization.
Team NewsBarons connects with Real Estate industry leaders to understand their views on the impact of second wave of the pandemic on real estate and also, whether the discontinuation of the stamp duty rate cut will have any ‘real impact’ on sales.
Work and study from home are definitely here to stay for some more time: Dr. Niranjan Hiranandani
The second wave will have a similar effect on those who opt for rental homes and those who have turned ‘fence sitters’ as the first wave and the lockdowns had: it will drive the realization that the safest place to be during a partial or complete lockdown is one’s own home. Secondly, ‘work and study from home’ are definitely here to stay for some more time, so some families will find that it makes sense to shift to a larger home with flexi-interiors.
Also, the Indian home buyer tends to first see in person by physically visiting the prospective home before completing the process of buying the home; this is where the lockdown will increase the time taken from selecting one’s ‘dream home’ to actually completing the sale.
The stamp duty rate cut has definitely played a role in enhancing sales, but it is not the only positive factor which impacted sales through September 2020 till the end of the scheme. The other factors are still present like home loan interest rates being at historic lows; real estate developers offering ‘sweet deals’; and these are positively impacting home buyer sentiment.
Those who missed the stamp duty rate cut will feel they ‘missed the bus’; but it will not result in their putting home buying plans on hold, or even turning fence sitters.
[Dr. Niranjan Hiranandani is the National President of NAREDCO and MD of Hiranandani Group]
We are much better prepared today than we were in 2020: Anuj Puri
While the situation is certainly grim, we are much better prepared today than we were back in 2020. Hence, the impact of the rising Covid-19 cases across the country will not be as significant on the overall housing sales as witnessed last year. Having said this, there will be some impact on the overall sales volumes in the ongoing quarter or even thereafter if cases continue to rise. This is mainly because the two most active cities – MMR and Pune – which comprised 53% overall sales share in Q1 2021 are the worst affected cities presently.
Also, incentives such as limited-period stamp duty cuts and lowest-best home loan rates (starting at 6.70%) in the state were not extended beyond March 31, 2021. All in all, these factors coupled with the partial lockdown imposed due to the rising cases could play a dampener on overall housing sales in the upcoming period.
[Anuj Puri is the Chairman of ANAROCK Property Consultants]
There will be a big impact on construction activities at project sites: Dhruv Agarwala
While this will once again have an impact on the housing sector, which was witnessing a recovery, we believe the impact will be mitigated as many property buyers have moved to online search and discovery since last year’s lockdown. This was helped by the real estate industry’s successful digitisation of the home buying/ selling and renting process, which has moved online to a big extent. However, there will be a big impact on construction activities at project sites.
[Dhruv Agarwala is the Group CEO of Housing.com, Makaan.com and Proptiger.com]
The government can consider extending support like the last year: Ashok Chhajer
The good thing so far has been that construction activity was uninterrupted. The restriction on movement has slowed down customer visits but we are leveraging technology to build a funnel of interested buyers through digital marketing tools, virtual meetings and the like. Provided, there is no complete lockdown for an extended period of time, sales should make up for the lost time once the environment is brought back to normalcy. The government on its part can consider extending support to prospective purchasers like the last year.
The sector had gained good momentum in the 3rd quarter of last financial year and we saw sustained customer sentiment going in the 4th quarter which was a confluence of historically low interest rates, government initiatives such as stamp duty reduction, affordability etc. While government may have their own constraints, there was a case of continuing the stamp duty reduction for a further 6-9 months which could have helped the recovery put a firm foot in the ground. Having said this, developers will now have to come with innovative value propositions for the customer to keep up the sales momentum.
[Ashok Chhajer is the CMD at Arihant Superstructures Limited]
There will be some impact as site visits will decrease: Anil Pharande
There will be some impact as site visits will decrease. On the other hand, people are more eager than ever to own homes in this pandemic, so online enquiries are already increasing. Developers will be able to close out these sales once the situation stabilizes.
There will be a decrease in sales by between 10-15%, but this will even out again. Property prices are still at their lowest in the last 10 years and home loan interest rates continue to be attractive. However, the main reason is that
people very much want to own homes now.
Developers will continue making adjustments to ensure that this demand is catered to.
[Anil Pharande is the Chairman of Pharande Spaces]