Question Mark Over Future Of Real Estate After Lockdown 2

Just when the real estate sector was picking across the country, the second wave has hit the sector really hard. In Mumbai, the scene is looking bleak. According to Squarefeatindia.com, a leading real estate website, “property sales in Mumbai in May 2021 saw a 50% dip to 5,360 units from 10,135 units in April.” The reason for this fall is the withdrawal of incentives by the Maharashtra government. It may be recalled that during the first lockdown – in August 2020 – the Maharashtra government had slashed stamp duty to 2% from 5%. This had a salutary effect on property sales.  Besides, new sales, It is learnt, many investors who bought flats and had not registered took advantage of this low rate and got their properties registered. Thus, between September 2020 and March 2021, property registrations were brisk. In December 2020, property sale-registration peaked at 19,581 units — 204% jump over December 2019. Citing this example, the industry’s apex body, CREDAI-MCHI, has dashed off three letters to Maharashtra Chief Minister Uddhav Thackeray, urging him to once again reduce stamp duty to 2%. The other setback to builders is that nearly 4.22 lakh homes, across the top seven cities, which were expected to be completed by December 2021, will be delayed due to disruptions in supply chain.  Add to this, work from home culture is hitting sale of commercial premises and leases. According to Squarefeatindia.com, “There are 7,400 Office Leases, spanning approximately 90 million sqft which will come up for renewals in 2021 across Bengaluru, Mumbai, Pune, Chennai, Gurugram and Noida.” But real estate agents are not bullish about renewal possibilities.