The novel coronavirus pandemic has negatively impacted the real estate industry to an extent that 65 percent of flat purchasers have been defaulting on instalments since last week, The Times of India has reported citing MCHI-Credai.
MCHI-Credai is the apex industry body that represents over 1,400 builders in the Mumbai Metropolitan Region (MMR). There are as many as 10,200 residential projects in MMR registered under the housing regulator, MahaRERA, with a total construction area of around 50 million sq ft.
With the closure of shopping malls as a preventive measure amid the rapid spread of COVID-19, there are indications that retail tenants will also stop paying rents to mall owners, the report suggests. The mall owners will in turn not be able to service their loans owed to banks.
“Since June 2019, on an average 25-30 percent flat buyers of any project were defaulting on instalment payment on the due date. However, after the outbreak of COVID-19 pandemic, the situation has become critical with almost 65 percent of customers defaulting in paying their installments linked to construction,” the newspaper quoted MCHI-Credai as saying.
The report adds that MCHI-Credai has asked the Maharashtra government to suspend property tax and payment of various premiums to the Brihanmumbai Municipal Corporation (BMC) for one year without interest.
Moneycontrol could not independently verify the report.
Further, the industry body has urged that all premiums payable to BMC and the state government be reduced by 75 percent for five years and zero percent stamp duty for all fresh sales of flats for six months to encourage the public to buy new properties.
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