Mumbai has come a long way from being a sleepy fishing hamlet of seven islands in the 1800s to being the financial capital of the country. Contributing to six per cent of the nation’s economy and Rs. 1.91 trillion in corporate taxes in FY2020 it plays true to its moniker of the ‘Maximum city,’ as it is the wealthiest and the most densely populated Indian city.
The recent developments increasingly indicate that the dream of owning a home in the metropolis is close to becoming a reality, more than ever in the past couple of years. This is possible because of enabling factors like the economy, government fuelled incentives and change in the prevailing mind sets.
The 2018 NBFC crisis led to market consolidation, with grade A developers gaining a larger market share owing to inability of smaller players to fulfil their commitments devoid of cheap money. This has led to limited supply in the market in terms of new projects being launched. A recent Anarock report stated Mumbai Metropolitan Region (MMR) witnessed highest y-o-y decline of unsold housing inventory in the last 7 years. It could result in a possible price hike.
Preference for grade-A developers & integrated townships
Having experienced the flexibility and commute-less remote work, buyers are now open to the idea of owning a home in the surrounding suburbs of Mumbai called the Mumbai Metropolitan Region (MMR). What makes MMR an attractive destination is the fact that buyers are now looking to buy bigger homes to accommodate the Work-from-Home aspect.
Buyer are looking at self-contained integrated townships. In addition, the buyers have shown a marked preference for properties developed by tier-1 developers and in the process willing to pay a premium over the market price. There is a two-fold reason explaining this behaviour, one being that even with MAHA-RERA deterrent, tier-II & III developers have struggled to deliver their projects on time without cost overruns. The second reason is the assurance of quality and the amenities provided by the tier-1 developers.
The right time to buy house is now
The major constituent which is fulfilling the aspiration of buying a house of their own in Mumbai a real possibility is the lowest ever interest regime prevailing in the current times. The potential home-buyer has never had it so easy with the interest rates hovering around 6.5-7% for a home loan. For many potential home-owners the gap between paying a high rent and paying a loan EMI is significantly narrowed or in some cases wiped out completely. Despite the looming spectre of inflation, the easy interest rate regime is unlikely to go away this year given the fact that the country is buffeted by economic headwinds induced by the pandemic. This makes the current scenario the most opportune time for buyers to avail of the low interest home loans before the government raises the rates.
Model Tenancy Act makes second home investment a reality
Adding teeth to the low interest rate regime in making the investment in second home an economically viable option is the recent approval of the Indian Government to approve the Model Tenancy Act. This piece of regulation clearly delineates the duties and the rights of both the landlord and the tenant. For a potential investor seeking to invest in a second house now has an iron-clad regulation and need not fear tenants from overstaying. This is expected to increase the demand in the housing sector.
Mumbai to MMR
Making the prospect of buying a house in MMR a viable idea is the fact that the State Government has stepped up its increased investment in transportation infrastructure like the criss-cross network of metros, trans-harbour link and coastal road amongst others. The Government’s commitment can be gauged by the fact that even the ongoing Covid-19 has not significantly reduced its ambitious focus to link MMR with Mumbai city except some minimal delay in isolated cases. This enhanced planned infrastructure expected to be completed in the next 2-3 years for better transportation linkages of MMR will further drive the city’s growth and it will continue to be top preference for job seekers from across the country.
Disclaimer: This is a company press release. No HT journalist was involved in the creation of this content.