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COVID-19 impact: Here’s how much prices of premium properties have fallen in Mumbai and Delhi NCR

Some premium properties in Mumbai have seen a 15-20 percent correction, while the Delhi NCR has seen a 10 percent drop in some pockets. Developers slashed prices during the peak of the pandemic due to the uncertainty caused by the lockdown.

Representative Image (Source: Reuters)

Representative Image (Source: Reuters)

For almost a year, Abhinav Sagar (name changed), a construction material dealer, had been hunting for a high-end property in Mumbai. In August 2020, he settled on a 400 sq m ready-to-move-in residential unit in Malabar Hill for around Rs 50 crore and registered it two months later at a discounted stamp duty rate, benefiting by almost 20 percent. This was thanks to Covid-19 and the resultant cash flow issues being faced by the developer.

Sagar is not alone.

In Delhi-NCR too, some premium, large-sized properties located on Golf Course Road in Gurgaon are being sold at a discount of almost 10 percent due to tardy sales. A 3BHK unit with a prime builder in the area was recently sold for around Rs 3 crore. The going price pre-Covid was around Rs 3.4 crore.

Even if one were to analyse the premium properties registered in the second half of 2020, several instances of price correction are evident. A property worth Rs 50 crore located in one of the projects in Malabar Hill, Mumbai, was registered soon after the stamp duty cut.

This was transacted at almost Rs 1.07 lakh per sq ft, which is an almost 15-20 percent correction from the pre-Covid level of Rs 1.30 lakh per sq ft. The price should have been around Rs 65 crore in normal times, says a broker active in the area.


In December 2020, a top-notch CXO also bought a top floor, sea-facing property worth Rs 50 crore in the Malabar Hill area.

“This unit was bought at almost Rs 1 lakh per sq ft before Covid-19. A similar unit would be currently trading at Rs 80,000 per sq ft, which means the price would be around Rs 45 crore and most of these units would be located on the lower floors, which may not be easy to sell, especially in the case of sea-facing properties,” another broker active in the area told Moneycontrol.

“It’s mostly the higher floors that command a premium,” he said.

It should be noted that while most premium deals registered in 2020 were negotiated and sealed before the lockdown, there was a spurt in registration only after the stamp duty cut was announced. Very few buyers closed deals during the April-September period. The majority of the registrations that took place after the stamp duty cut was announced late in August were to do with properties bought before the lockdown began in March. Actual sales picked up in some pockets only during the festive season in 2020.

Some developers also slashed prices of premium apartments during the peak of the pandemic due to the uncertainty around the lifting of the lockdown. A leading developer in Mumbai sold 30 units for Rs 64,000 per sq ft during the height of Covid-19 but is now selling similar units at Rs 75,000 per sq ft, brokers said.

MMR, due to its high population density, was one of the cities worst affected by the Covid pandemic. Consequently, the lockdown imposed in March extended to over nine months in the form of partial lockdowns. Several parts of the city had to go into a second lockdown after partially reopening in June.

Due to the high Covid-19 case load, MMR has been the slowest among the top cities to lift restrictions under the phased unlock process, a recent report by Knight Frank India had said.

Maharashtra stamp duty cut impact

Things changed after the stamp duty cuts came into effect from September 2020 for a limited period, with sales skyrocketing.

The effective stamp duty rates were brought down by 300 basis points from 5-7 percent to 2-4 percent across various regions in MMR from September till December 31, 2020 and brought down by 200 bps from January 1, 2021 till March 31, 2021.

In addition to the indirect discounts/price cuts they had been offering earlier, most MMR developers have offered to absorb the remaining stamp duty incidence. Enticed by these offers, fence sitters have also jumped onto the bandwagon and contributed to the sharp demand upswing.

As per the Maharashtra government’s Inspectorate General of Stamps and Registration, sales in each month before the stamp duty cut (i.e. April-August) were down by more than 50 percent compared to that recorded during the same period in the previous year.

In absolute terms, the savings from stamp duty reduction were higher in the expensive MMR markets. Further, the relatively higher income groups had not taken much of a hit on their income streams and also had a big cushion of savings.

As a result, the expensive MMR markets and luxury segments, which were languishing for the past few years, witnessed a surge in sales. The relatively more expensive MMR markets such as South Mumbai, Central Mumbai and the Western Suburbs outperformed other MMR markets in Q4 2020 and in H2 2020.

South Mumbai witnessed the highest growth in sales during H2 2020 at 112 percent, followed by Central Mumbai at 106 percent and the Western suburbs at 76 percent. Of the apartments sold in H2 2020, 57 percent were priced above Rs 50 lakh, as per the Knight Frank report.

In the beginning of the festive quarter in October 2020, South-Central Mumbai localities witnessed luxury home sales worth Rs 500 crore, as per an analysis by Anarock Property Consultants. In 2019, the corresponding period had seen luxury sales worth approximately Rs 150 crore. South-central localities include Worli, Prabhadevi, Mahalaxmi, Tardeo and Lower Parel, with average ticket prices beginning at Rs 4 crore.

These micro-markets host some of the biggest and most prestigious luxury housing projects in the city, and thus attract business leaders, sports personalities, other celebrities, start-up founders and C-Suite professionals.

“The limited-period stamp duty cut of 3 percent up to December 2020 and 2 percent between January-March 2021 has had an impact even in Mumbai’s hyper-expensive luxury locales. At such steep ticket prices, even HNIs are not impervious to potential savings. The offers currently rolled out by developers are also pushing sales in these markets. The stamp duty cut alone helps buyers save at least Rs 12 lakh on a property worth Rs 4 crore, and the saving increases in tandem with the average property cost. The pandemic impact on this clientele is seen to be minimal, with buyers largely scouting for ready homes or those nearing completion,” said Anuj Puri, Chairman, Anarock Property Consultants.

“The correction in the premium segment, especially in case of properties in the range of Rs 25 crore and upwards, was around 8-10 percent but this was dependent on the individual developer’s cash requirement and market demand. Most developers sold their inventory at a discount at the height of the pandemic. They were in a tearing hurry to liquidate their stock as they were unsure about how long the lockdown would last,” said another broker.

Pandemic impact on mid-segment units

Mid-segment properties (Rs 5 crore-10 crore range) also witnessed a correction of around 15 to 20 percent during the pandemic but most of these deals were resale transactions. Several secondary deals in premium projects located in Worli were selling for Rs 6 crore instead of Rs 8 crore. A unit bought for around Rs 50,000 per sq ft, recently concluded for around Rs 40,000 per sq ft in the resale market, a broker active in the area said.

Properties in the resale market worth Rs 10 crore are now available for around Rs 8 or Rs 8.5 crore, which is almost 20 percent due to an individual seller’s cash requirements and ample supply of ready-to-move-in units in the market.

Even residential properties located close to BKC, Mumbai’s central business district, were available at a discount of 10-15 percent during the lockdown but there were very few transactions. Properties in this market commanded a price of Rs 75,000 per sq ft on carpet before the pandemic but are now available for around Rs 60,000 per sq ft in the secondary market.

According to Mani Rangarajan, Group COO,, and, price growth has been more or less muted in the Indian real estate market over the last couple of years. Prices grew in the low single digits during the Q1 calendar quarter in 2020 across most cities.

“We saw muted price growth during Q2 to Q4 as well. Prices have not declined significantly given end-user demand, especially subsequent to the lockdown and the fact that developers cannot afford to slash prices significantly given the increased input costs and flexible payment plans that add to developers’ financing costs,” said Rangarajan.

“We are seeing that buyers’ outlook towards real estate is positive given the reinforced importance of a home, lower interest rates and higher volatility in other asset classes.  We do not anticipate any further downward trend in prices over the next year; on the contrary, we may well see some price increase in certain micro markets contingent on economic recovery and continued growth in demand,” he added.

Pent-up demand unleashed in Delhi-NCR; some pockets witness 3-5 percent increase in price

Real estate brokers in Delhi-NCR told Moneycontrol that sales have inched up after July due to pent-up demand being released. “There were barely any sales in the market from April to June. We started receiving enquiries only from July onwards,” says Nitin Jain of Prudential Realtors, a real estate broking firm in Delhi-NCR.

He says that demand for bigger homes has gone up, especially in ready-to-move-in projects. “A 1,685 sq ft apartment that was priced at Rs 1.40 crore pre-Covid is now going for Rs 1.50 crore due to demand for such projects. In Greater Noida West, too, demand for affordable ready-to-move-in homes is up and some established developers have increased prices,” he said.

However, some pockets in Greater Noida that have ready inventory, are feeling the pinch due to lack of demand and the distance from the main city, he adds.

In Gurgaon, too, some pockets that have ready inventory are witnessing a 3-5 percent increase in prices. A local broker recently sold a 2 BHK unit for Rs 1.5 crore. It was going for Rs 80 lakh before Covid.

Builders, too, have increased prices in the case of the rare launches in Gurgaon during the pandemic. A project was launched on the Dwarka Expressway a few days ago at a price 6-7 percent higher than the pre-Covid rate. The previous launch, which took place over a year ago was at Rs 6,800 per sq ft. The new launch price in the third phase of the same project is Rs 7,200 per sq ft, a broker active in the area said.

“This price in no way sets a benchmark for all new projects in the area. It is project- and developer-specific,” the broker said.

Rental market looking up in certain pockets

Notwithstanding the lows witnessed by the real estate market during the pandemic, real estate brokers say that the vaccine offers immediate hope for the rental market.

“The leasing market, which has corrected by 10-30 percent in Mumbai on account of the pandemic, may recover faster than you think as offices gradually reopen and people return to their place of work,” said a broker.

Units that commanded a rent of Rs 50,000 before the lockdown were down to Rs 40,000 at the height of the pandemic but should soon be back at Rs 48,000 levels as offices gradually reopen, they say.

“The rental market in the mid-segment is expected to revive faster than the luxury segment as more people are currently in the market scouting for higher discounts for outright purchases in the premium segment than for rental deals,” said one broker.

Some brokerage firms have also started receiving enquiries from expatriates. “That market too has started to look up,” said a broker.

However, rentals, too, are dependent on the quality of the project and the developer. “A few pockets on Golf Course Road in Gurgaon are witnessing a 10 percent reduction in rentals. Some units that were available for Rs 60,000 per month are now going for Rs 45,000 per month. This is primarily to do with high supply and less demand,” the broker said.

A few branded projects in the same area, which commanded a rental of Rs 1.4 lakh per month, are now being leased for Rs 1.6 lakh per month. “It’s all to do with the quality of the project, location and the developer,” the broker added.
Vandana Ramnani
first published: Jan 21, 2021 12:26 pm

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