In an effort to boost the sagging real estate market due to coronavirus outbreak, the Maharashtra government decided to temporarily reduce stamp duty on flats from 5 percent to 2 percent till December 31 2020.
Speaking to CNBC-TV18, Keki Mistry, VC and CEO of HDFC, said that other states may also follow suit of stamp duty cut announced by Maharashtra.
“I think the other states may also follow suit because housing can spur economic growth in a big way because of the fact that it can create so many jobs,” he said.
On the inventory issue, Mistry said, “The inventory problem is more in certain locations; it is not all over Mumbai, it is in certain parts of Mumbai. So, if you see Central Mumbai, yes, there is a lot of inventory, but if you see suburbs of Mumbai, the inventory is not there at all."
“In the last couple of years, not just post COVID, but even a year prior to that, the launch of new projects particularly in Mumbai has slowed down significantly. So, if the existing supply gets exhausted or gets used up, we are not going to have that much new supply coming to the market. So, on a case-to-case basis developers are cutting prices. If a developer believes that the customer is genuine and he has the money and is interested in buying the property, you will find that the builder will come forth and give some price cuts, but this varies from property-to-property and developer-to-developer,” he further added.
Speaking about rates, he said that the rates have troughed out. “I do not see too much scope for rates to go down now. Rates have gone down a lot over time and compliments to Reserve Bank of India (RBI), they have infused enough liquidity in the system over the last 4-5 months,” he said.