Backed by the government’s policy support, Maharashtra has witnessed a spike in residential sales in the last quarter of the year 2020. The state introduced a slew of measures to minimise the COVID impact on real estate in Maharashtra.
Home is the safest place to be – and this makes more sense than ever now. During the lockdown, we saw migrant workers and millennials working in corporate jobs going back to their hometowns – the home they came from. Having said that, how can we not mention the vital contribution of Indian Real Estate in developing homes for all sections of the society against all odds. The year 2019 registered a sale of 2.61 Lakh units across seven metro cities. However, the year 2020 eroded business values and growth prospects for a lot of industries across the world with real estate being no exception. If we look at the brighter picture, the government’s timely reforms provided some instant relief. Backed by firm policy support, Maharashtra managed to deal with the COVID impact on real estate and emerged as one of the top states w.r.t residential sales.
The state introduced a slew of other measures and some proved to be a shot in the arm for the real estate sector in the state. As the year comes to an end, Square Yards delves into the various measures adopted by the state to ensure that the realty sector is back on its foot soon.
Stamp Duty in Maharashtra – Currently One of the Lowest in the Country
Maharashtra Government took a well-thought and highly-appreciated decision by reducing the stamp duty from 5 percent to 2 percent until December 31, 2020. Following the trend, NAREDCO decided to give a Zero Stamp Duty booster to homebuyers from September 3, 2020, to October 31, 2020, which was later extended till December 31, 2020.
RECORD HIGH REGISTRATIONS IN MUMBAI OVER THE LAST 9 YEARS – Homebuyers welcomed the stamp duty reduction with open arms. Mumbai witnessed a record high volume of home sales at 9,301 units in the month of November 2020 which is a whopping 67 percent rise over November 2019. The registration rate in the month of November rose by 17 percent month on month and 67 percent year on year. This comes after the 42 percent month on month growth during October 2020 and 112 percent growth during September 2020.
Ease of Doing Business Reforms in Maharashtra – A Step to Revitalise the Sector
The government has planned a unified development regime for all areas with the city of Mumbai being an exception. These new rules will lead to a rise in the permissible buildable area indices across cities and towns. Moreover, it will encourage the development in metropolitan regions, municipal councils, and civic corporations.
The government has enhanced the permissible floor space index and introduced relaxations under certain planning norms.
Builders will now be entitled to incentive FSI for the redevelopment of integrated township schemes and slum rehabilitation. Builders can avail compensatory FSI of 80 percent over and above the permissible limits for commercial developments and 60 percent for residential developments.
Construction Premium Halved for Developers
The state Finance Department approved slashing construction premiums by 50% for the builders till the month of December 2021. Since the COVID-19-induced lockdown had delayed a lot of construction projects, this move brought a much-need fillip to the real estate sector. Considering the market conditions and the freeze in liquidity, this perk was applicable for construction projects across the state. Moreover, this perk would also be applicable for ongoing projects where the instalments of construction premium have been paid. However, this concession came with a rider. This facility will be applicable only for those who pay their instalment as per the schedule.
Validity of Realty NOCs Extended By 9 Months
Showing their empathy towards everyone who faced disruptions because of the COVID-19 pandemic, the Maharashtra Government declared the extension of the validity of all realty NOCs in the month of June, 2020. The validity of all time-bound building permissions, completion certificates, and No Objection Certificates was extended by nine months.
Relief to Developers – The Government has exempted developers from paying any interest on all instalments during this entire period. This goes for all clearances provided by different agencies – valid for a limited period or more. This includes environmental committees, state pollution control board, traffic, and transportation department, landowning agencies, building plan approval section. Support from the government will definitely provide a breather to the builders looking at the shortage of labour and other challenges caused by the COVID-19 crisis.
The government of Maharashtra’s strong stimulus in the form of policy reforms led to an uptick in real estate sales. This was complemented by the historic low home loan rates. Developers supported the sales velocity by introducing lucrative offers and discounts during the festive season, which drove the end-users’ decision to invest. Battered by the lockdown, the Maharashtra real estate sector cruised through the COVID impact and shows significant signs of recovery now.
