In comparison to the December sales records of the last five years, Greater Mumbai has registered the highest property sales in the last month of 2020. According to data from the Department of Registrations and Stamps, over 14,783 real estate deals came through out of which approximately 90% are apartments.
Liases Foras, a real estate research firm, revealed that the value of 14,783 units registered in December 2020 is approximately Rs 24,700 crore. Pankaj Kapoor, Managing Director of the firm, said, “This has been computed from the 2% stamp duty collection amounting to Rs 494 crore.”
Market experts believe that recovery in the real estate sector is the product of Maharashtra state government’s decision to reduce stamp duty to 2% on the sale of flats. Since this clause is only valid from September 1 to December 31, people have capitalized on the opportunity and possibly initiated a trend that drives real estate market growth through the beginning of 2021.
Furthermore, this has been possible because of builder co-operation. Responding to the lack of minimum sales throughout 2020, many builders have taken a personal cut over the stamp duty reduction in order to lure the potential buyer into a converted sale.
While other state governments could follow the same route and invigorate their property markets, it is easier said than done. Stamp duty collection is one of the premier contributors towards state revenue and it is difficult to take such a bold step at a time when multiple states have not received their annual GST returns and continue to struggle for worker’s salaries.
From a market perspective, a spring effect was observed. Multiple lockdowns and restrictions throughout the year improved people’s spending power with limited available avenues. In addition, the public has been closely monitoring low prices in the real estate industry and eventually, made its final move before the end of 2020.
From January 1 to March 2021, the stamp duty will be revised to 3%, and the psychological impact of a new year is expected to induce new market trends.