The ongoing pandemic has had substantial impact on almost every sector of the Indian economy and the real estate sector is no exception. With a dip in the demand for property across various parts of the country in the wake of the initial lockdown during the first half of 2020 and the resulting austerity in consumer spending, the horizon of the sector seemed bleak.
However, in the past few months, the Indian real estate sector has picked up speed again and the segment that has benefited the most from this recovery is the luxury housing market. The demand for luxury houses in Mumbai, in particular, has been on the rise with the nation’s financial capital reporting luxury property deals in excess of ₹4,000 crores from January 2021 to June 2021.
Why The Luxury House Market Is Back on the Growth Track?
There are several reasons why the luxury housing market in the country, in general, and the market for luxury houses in Mumbai, in particular, have witnessed a somewhat rapid recovery from the multifaceted and far-reaching impact of the Covid-19 pandemic.
• Rise in buyer sentiment
The negative buyer sentiment that accompanied the first year of the pandemic has somewhat receded and a wave of cautious optimism is being witnessed in the trends for the real estate sector. This shift has been a significant contributor to the recent upshift in the sales figures for the luxury housing market in Mumbai.
From January 2021 to May 2021, more than 1.26 lakh housing units were sold in Mumbai. A majority of these luxury housing units were sold in the areas of central and South Mumbai. It is worth noting here that the sales figures for luxury houses in Mumbai during the first five months of 2021 represent a significant increase over the corresponding months of the preceding year.
• Reduction in stamp duty
The reduction in stamp duty in Mumbai from 5 per cent to 2 per cent during September, 2020 drove a massive surge in the registration for properties. This reduced rate of stamp duty was valid till December 2020.
It is worth noting here that 1.13 lakh properties in the Greater Mumbai area were registered between September, 2020 and July, 2021.
The above upward trend in the registration of properties in Mumbai painted a stark contrast to the corresponding figures during September 2019 to July 2020, which stood at 42,500. registrations, thereby representing a year-on-year rise of 166 per cent . Although the stamp duty was increased to 3 per cent in late March, 2021 and, the upward trend of the real estate sector in Mumbai has not broken its stride.
• Rise in Liquidity
With the gradual easing of the restrictions put in place during the lockdowns that followed the Covid-19 pandemic, there has been a corresponding increase in businesses getting back on track. One of the sectors that had been the worst hit during the pandemic was retail, shop owners and departmental store employees finding it difficult to own a house.
However, the recent reopening of retail establishments, albeit with certain restrictions, has enabled people to enjoy a higher degree of liquidity and security than they did during the lockdown. With their businesses and incomes back in order, people are increasingly considering the purchase of houses.
• Home Loan Rates at a four-decade low
As of May 2021, the interest rates for home loans in India were recorded as being at their lowest during a period going back to the early 1970s. Consequently, people looking to buy homes have added motivation and assistance to follow through on their plans. This change in buyer sentiment, although intangible and largely non-measurable, can be observed in the growth in the sales and registration figures for houses in Mumbai.
The combination of improved buyer sentiment and the reduced cost of home loans in the country have been significant driving force behind the recent recovery of the real estate sector.
• Rapid infrastructural developments
The ever-increasing development of infrastructural projects in the city, particularly in its southern part, has also had a substantial impact on the growth of the luxury house segment in the city. For instance, the Bombay Municipal Corporation (BMC) have announced the construction of two road over-bridges to reduce the traffic in Mahalaxmi area and enhance its connectivity.
In addition to the planned road over-bridges, the third line of the Mumbai Metro is expected to improve the connectivity of Mahalaxmi with different parts of the city and decrease the congestion on the area’s roads. . What’s more is that the area is set to enjoy a more seamless connection with the suburbs of the city after the completion of the Mumbai Monorail Project.
With an increasing number of house buyers gravitating towards luxury houses , the real estate sector in Mumbai is expected to scale greater heights in the foreseeable future.
• Why You Should You Choose Piramal Mahalaxmi?
With proximity to Mahalaxmi Racecourse, views of the Arabian Sea and access to the rich, diverse, cosmopolitan culture of South Mumbai, Piramal Mahalaxmi is not just a residential project but an experience with several intricate layers. Adorned with state-of-the-art amenities that carefully balance luxury and comfort. You can find a home that helps you stay connected with the city whilst also retaining your connection with yourself.