The COVID-19 crisis has forced the businesses across the world to come to a grinding halt and it sure did deal a major blow to the real estate sector. The home buying cycle in India, especially in metro cities like Mumbai has been massively impacted and transactions continue to remain low. Having said that, with the lockdown easing in the country at the right time when there are a weak demand and oversupply scenario, the property prices have come down in Mumbai. So, is it the right time for buying a flat in Mumbai? Should we wait for a further decline in prices? Here are a few things you need to keep in mind if you’re on the edge of making your decision.
Unprecedented price cuts and offers:
The pandemic has caused the construction activities to halt and hampered the expected growth trajectory for 2020. Moreover, job insecurities and pay cuts have affected the home buyer’s sentiment leading to an increase in unsold inventory. According to real estate experts, of all the total unsold ready stock, the Mumbai and Pune regions together have more than 35,000 units that are collectively worth more than INR 37,500 crore. But this same scenario has led to a fall in property prices across India. Experts predict that the prime market segment of Mumbai is expected to see a price fall of 5% in 2020 and some even believe that the prices may fall even further due to lack of demand and expected delays in project completion due to lockdown and shortage of labour. Developers are also using this to their advantage and are trying to sell their properties with attractive offers and price cuts. So, you’re on the pink of your financial health, you can use this opportunity to negotiate and strike a deal with developers for buying properties in Mumbai at low cost.
Buying a flat in Mumbai with low home loan rates:
On account of the pandemic, the Reserve Bank of India has reduced the repo rate from 6.5% to 4% since last year. Many banks including ICICI Bank, Indian Bank, State Bank of India, HDFC bank have reduced their home loan rates. Currently, some banks even offer interest rates as low as 6.85%. Also taking Pradhan Mantri Aawas Yojana into account that offers interest rate subsidy, the rates could even go lower depending on your income level. On top of this, to ease the pressure on the struggling real estate sector in Maharashtra, the government of Maharashtra recently announced that there will be a reduction of stamp duty. For Mumbai, the stamp duty rate applicable till August 31 was 5%. The stamp duty rates applicable from September 1, 2020, till December 31, 2020, is 2%, and from January 1, 2021, till March 31, 2020, it’s 3%. If you’re thinking of buying a flat in Mumbai, this could save you a considerable amount of money. So, many home buyers are likely to benefit from the all-time-low interest rates and stamp duty reduction.
Rise of ready to move-in houses:
The pandemic has pushed many people behind the doors and people staying in cramped apartments and rented homes in densely populated cities like Mumbai have felt the pinch. With poor access to green spaces and fresh air during the lockdown, many people especially millennials in Mumbai are showing great interest in buying their own home. However, most of the people are not ready to risk their money on under-construction properties that had been staying put since the lockdown due to the lack of construction workers. So, ready-to-move-in houses have gained prominence during this pandemic in the last few months. So, as a home buyer looking for buying a flat in Mumbai, you can explore options in the ready-to-move-in segment if you want to avoid the associated construction risk due to COVID-19.
The importance of owning a physical asset like a house during a crisis has been highlighted in this pandemic. Although there still is an uncertainty in the market and the low-price factors are technically temporary, the pandemic did bring in an unprecedented advantage to the home buyers who were waiting for the right time for buying a flat in Mumbai. Thus, considering all these, it is really a good time for buying a flat in Mumbai for end-use, if you are financially stable and can afford it.