Maharashtra stamp duty cut may spur sales of smaller apartments: Realtors

The cut in stamp duty and levies in Maharashtra is expected to spur sales of smaller apartments over other segments, say developers and lenders.

“There is pent-up demand. I feel demand for smaller apartments will rise as people want to buy new homes,” said Deepak Parekh, chairman of HDFC. He added that there already is inventory of ready-to-move-in apartments. “Developers are cash-strapped due to Covid, and depending on their conditions, are ready to give good deals,” said Parekh.

Kamal Khetan, chairman of Mumbai-based Sunteck Realty, said the reduction in rates will boost sales of low- and mid-income housing, given these are the price-sensitive segments, compared to the bigger apartments. “There will be substantial saving for buyers,” said Khetan.

Mumbai Metropolitan Region (MMR) has the highest unsold inventory among top cities. All top cities, including MMR, saw an over-50-per-cent drop in sales during the first half of CY20, compared to H1CY19. MMR has seen negligible launches since April. The state, on Wednesday, cut stamp duty rates from 5 per cent to 2 per cent in urban areas of the state till December 31, and 3 per cent till March 31, 2021. Urban local body tax has been retained at 1 per cent.

In rural areas, stamp duty rates have been cut from 4 per cent to 1 per cent till December 31, and 2 per cent till March 31, 2021. Developers said fence-sitters would come back to the market. “It will hasten demand for apartments and persuade buyers to act. So far, many had deferred their buying. The government’s announcement will make them take decisions,” said Niranjan Hiranandani, MD of Hiranandani Communities.

Vikas Oberoi, chairman and MD of Oberoi Realty, said: “I think this is a bonanza for buyers. We will see a huge surge in buying. There is tremendous pent-up demand. People have been waiting for something like this. Now is their chance.”