Luxury apartment sales make a comeback in big cities; stamp duty cut helps

South-Central Mumbai localities in October had luxury home sales worth Rs 500 crore.
Sales of luxury apartments have bounced back, thanks to factors such as demand from non-resident Indians (NRIs), work from home, and cuts in stamp duty and other levies in some states.

Though sales of residential units have come down by 33 per cent in April-September this year to 42,250 units in the top seven cities in the country, the share of luxury apartments priced over Rs 2 crore has remained the same at around 10 per cent, said Anarock Property Consultants.

However, April and May were a washout for residential developers due to the lockdown.

Localities in south-central Mumbai witnessed luxury home sales worth Rs 500 crore last month, Anarock said in a recent study. In 2019, the corresponding period saw they worth about Rs 150 crore, which means there was an improvement of more than 230 per cent this year.

South-central localities include Worli, Prabhadevi, Mahalaxmi, Tardeo and Lower Parel, with average ticket prices beginning at Rs 4 crore. “The limited-period stamp duty cuts of 3 per cent up to December 2020 and 2 per cent between January and March 2021 have had an impact even in Mumbai’s hyper-expensive luxury locales. At such steep ticket prices, even high net-worth individuals are not impervious to potential savings. The offers currently rolled out by developers are also pushing sales in these markets,” said Anuj Puri, chairman, Anarock.

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 proportion 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, he said.

Piramal Realty’s luxury project Piramal Mahalaxmi in South Mumbai saw a 100 per cent jump in sales in the second quarter, mainly driven by NRI purchases.

NRIs in Singapore, the UAE, and the US contributed 40 per cent to sales, the company said.

Gaurav Sawhney, president, marketing and sales, Piramal Realty, said: “Despite the global economic scenario and the ongoing challenges, we have seen tremendous demand from NRIs. One factor in this is having the comfort of owning a property back home.”

Mumbai-based realty firm Sunteck Realty saw sales of 115 residential apartments priced above Rs 2 crore. In the National Capital Region, comprising Delhi, 7,300 apartments were sold during April-September, and at least 7 per cent of those were in the luxury segment.

“If we look at our data trends, in the past four months we have seen luxury home enquiries increase substantially in South Delhi markets, largely because many buyers have come in with the hope that they can get a negotiated deal,” Puri said. South Delhi markets include areas like Vasant Vihar, Westend, Shanti Niketan, Anand Niketan, Hauz Khas Enclave, and Panchsheel Park (N Block).

“There are more than 10 buyers at a given time — at least twice higher than the pre-Covid-19 levels. But there are limited stocks, which seems good for most of these buyers. These buyers are mostly end-users and hence they have specific demands. They are not ready to settle for just anything even if it is offered at a low price,” he added.

The most preferred home sizes have an area of 400-800 square yard and mostly on the third floor with a large terrace, he said.

DLF, the country’s largest, listed developer, saw a 35 per cent jump in its luxury residential sales in Q2 on a quarterly basis at around Rs 300 crore, the company said in an analyst presentation.

Realty check

> South-central Mumbai localities witnessed luxury home sales worth Rs 500 crore last month  
> October sales in South-central Mumbai showed a rise of 230% 
> In Delhi-NCR, 7% of  7,300 apartments sold during April-September were luxury homes
> While 1.5 and 2 BHK apartments are still the top sellers, 4 and 5 BHKs have many takers in Q2
> DLF saw 35% jump in its luxury residential sales in Q2 on a quarterly basis at around Rs 300 crore

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