Despite the COVID-19 pandemic, Mumbai’s luxury homebuyers are ready to play house again. In fact, quite a few property deals in the high-end segment have been finalised recently and some have even been registered after the state government decided to reduce stamp duty, suggesting that the Maximum City is fast getting its mojo back.
Earlier this month, the 23rd floor of apartment complex Samudra Mahal was sold for Rs 96,776 per sq ft, more than 1o percent cheaper compared to a previous deal that was transacted before the lockdown.
Local brokers said that this property is located one floor below the flat where Yes Bank’s founder Rana Kapoor had an apartment. A unit was sold in this project last December at about Rs 1.14 lakh per sq ft. This means that the unit price for this particular apartment is almost 11 percent less than a sale in 2019.
“What is important here is that even though the deal has been finalized at almost 10 percent discount, the fact remains that it has been stuck during the pandemic,” said the brokers.
The flat measures around 1710 sq ft and the sale price of the unit was Rs 16.50 crore. The buyer already owns a flat in the same project on the 13th floor which they bought in 2019.
Samudra Mahal is a nearly five-decade-old luxurious, sea-facing residential complex in Mumbai's posh Worli area. It is home the crème de la crème from the country's corporate world. The three-acre complex has about 100-odd apartments and two bungalows. Every fifth level of the building has a duplex.
The 3BHK units are of size 1,710 sq ft and the duplex is about 3,420 sq ft. Several owners have bought two 3BHK apartments and turned it into 'jodi apartments'. Until last year the rate was Rs 1.12-1.15 lakh per sq ft on carpet area for a 3BHK which made its worth at around Rs 22 crore -Rs 24 crore.
Local brokers told Moneycontrol that another property deal that was closed earlier this month was to do with six apartments in Artesia by K Raheja Corp.
A well-known business family has bought six apartments located on two floors, brokers said.
“Each apartment is priced at around Rs 20 crore and this is almost the same price that was doing the rounds pre-COVID,” brokers said.
Artesia by K Raheja Corp is an iconic standalone tower with views of the Arabian Sea and the Bandra-Worli Sea Link.
“The business family has bought three 'jodi' flats located on two floors to be utilized as two large apartments. The price is almost at pre-COVID levels at around Rs 70,000 per sq ft. If the price pre-COVID was around Rs 72,000 per sq ft, this deal was closed at a 1 percent discount,” brokers said.
In February 2018, the same business family had bought four apartments in a residential tower at Nepean Sea Road for Rs 240 crore.
K Raheja Corp did not respond to a request for comment.
Several transactions finalised before the pandemic are also getting registered now.
According to data from CRE Matrix, there were 14 real estate residential sales transactions that were registered in Mumbai city after registration offices reopened on May 18, and 159 in Mumbai suburbs. In June the number increased to 203 in Mumbai city and 1124 in Mumbai Suburbs. In the month of July, the number of transactions in Mumbai city touched 263 and 1526 in Mumbai suburbs.
An apartment bought in Oberoi Realty’s Three Sixty West project for around Rs 50 crore in 2019 was registered this month for around Rs 3 crore (at the prevailing stamp duty rates).
The premium project is located on Dr Annie Besant Road in Worli. The building is still under construction and is set to be the second tallest residential building in India with 85 floors. It is a mixed use project with two towers – one tower will have the Ritz Carlton Hotel and the other luxury units managed by the Ritz Carlton.
“This is a single apartment located above the 50th floor and was bought by a diamond merchant last year,” a local broker told Moneycontrol.
An email query sent to Oberoi Realty remained unanswered.
In July this year, IndusInd Bank’s former managing director Romesh Sobti and his wife had jointly bought two sea view apartments in this project for over Rs 76 core. The total stamp duty paid by them was around Rs 5 crore.
Real estate experts say that these property transactions during the pandemic suggest that there is demand at realistic price points.
“This is a positive beginning and the number of transactions may even touch pre-COVID levels if prices continue to remain at realistic levels. If the luxury market can show signs of revival at a 8-10 percent price reduction, there is likelihood of demand improving further if prices were to soften going forward. And if that happens, there is a possibility that the luxury market may even overcome pre-COVID transaction levels,” says Ritesh Mehta, senior director and head – West India, Residential Services, Developer Initiatives, JLL.
On August 26, the Maharashtra government decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020 to boost the stagnant real estate market hit by COVID-19. Stamp duty from Jan 1, 2021, until March 31, 2021, will be 3 percent. Later, the ready reckoner rates were hiked by 1.74 percent.
In March too, the Maharashtra government had announced that it was reducing stamp duty on properties by 1 percent (from 6 percent) for Mumbai, MMRDA Region and Pune for two years.
“This number is only going to increase as the festive season gets closer primarily for three reasons - the cut in stamp duty from 5 to 2 percent till December 2020; developers are expected to present their best offers of price schemes and payment flexibility schemes to attract buyers and interest rates are at their lowest ever in last two decades,” said Abhishek Kiran Gupta, the chief executive officer of real estate intelligence firm CRE Matrix.
As per CRE Matrix, the monthly average housing sales registrations per month in the period between April 2019 up to March 2020 was 3900 units per month. June 2020 clocked 1350 units and July 2020 clocked 1800 units.
Out of the 1800 housing units sold and registered in July 2020, about 1300 units are priced between Rs 50 lakh and Rs 3 crore and about 100 units are priced between Rs 3 to Rs 5 crore, with 50 units priced above Rs 5 crore.
“July has clocked about 46 percent of the pre-Covid-19 levels. We believe August 2020 onwards will see further rise and Mumbai will reach nearly 70 percent of pre-Covid levels before December 2020,” he said.
In August, Mumbai collected a registration revenue worth Rs 176 crore from registration of 2,642 sale documents. In September, it was Rs 95.47 crore from registration of 2,717 sale documents.
The numbers were lower on account of Pitru Paksh period that ended on September 17. They are expected increase during the festival season.