During the peak of the first COVOD-19 crisis a year ago, the Mumbai real estate market witnessed a massive panic. Humanity was facing the first-ever major crisis in 100 years. Work from home policies had proved that the life of Mumbai is becoming redundant along with the housing demands. Although predicting the economic crisis during COVID-19 was hard, but everyone was aware of the dangers.
Matoshree Nisarg has noticed that the 2nd wave of coronavirus may have shaken the financial capital; but stakeholders aren’t panicking this time as they did in the previous year. This is because coronavirus, although dangerous and killing many people, isn’t as deadly as initially assumed. Secondly, this time coronavirus couldn’t affect the economy aggressively. And thirdly, the announcement from the government to cut stamp duty will generate strong sales as well as a level of confidence.
However, most of the developers cannot claim that the real estate sector is booming. Most of the developers are predicting that the crisis of coronavirus will become softer after 31st July 2021. The only debatable point is the future or real estate market in Mumbai. Instead of waiting, you should purchase some good real estate such as a 1 BHK flat in Mulund.
The effect of coronavirus in the real estate sector was slow but inevitable. This was before the 2nd wave came. This is why most real estate developers have started looking at things rationally. As the Mumbai real estate market is expensive, everyone has learned their lessons. The age of absurd pricing is gone now.
However, don’t assume that the industry will work slowly from now on. The momentum created between September 2020 to March 2021 will shake all the stakeholders as well as builders, lends, and most importantly, the government. The future demand or pent-up demand is crushed during these 7 months. The ownership cost of homebuyers had been decreased by 15%. Additionally, many projects were reaping benefits at 20%. Developers were the main mastermind behind that, but lenders and the government also contributed. Lenders successfully achieve deal closures by offering interesting and attractive schemes. That contribution from renders is starting to come forward. As the stamp duty waiver has been removed, the government stopped supporting it. This means that developers need to take larger responsibilities to grab the attention of the customers.
There a famous debate on whether or not the prices of real estate will fall. Will the price continue to decrease for a year? Or the price will become sky-high until 3rd wave of coronavirus becomes reality. Most of the famous developers stated that the price of real estate in Mumbai and 1 BHK flat for sale in Mulund east will not decrease from here but will stabilize at the current level. These aspects aren’t wrong if you notice the large extent of the industry. Although real estate prices won’t start dropping now, the possibility of cost reduction is pretty higher. Only a handful of developers are still capable of offering a small buffer to their potential customers.
Hence, in the upcoming future, the real estate market will become stabilize just like before the pandemic. Unlike the recent cases where 1 BHK flat for sale in Mulund gained attraction, going forward will be one of the toughest choices for a developer. Only a handful of projects will be accepted and the rest of them will struggle.
However, if the FSI premium cut was to be taken to the logical conclusion, the scenario could become stronger. That is the amount of money paid by real estate developers to the government so that they can receive permission to create a greater area in a project. It’s been a long time since the expenses had gone out of hand. The FSI premium cut is undoubtedly a wasted opportunity.