Realty hopes for upswing in luxury housing biz

New Delhi: Luxury housing segment in real estate in India continues to receive much attention from home buyers as sales have improved post unlock. As per industry experts, luxury homes have seen fair share of traction post Covid-19 unlock since work from home is driving people to opt for larger homes with flexible interiors.

Dr Niranjan Hiranandani, National President, Naredco, spoke to Bizz Buzz, on the latest decision of Delhi government to reduce the Circle Rates and what this move could bring into the real estate industry. In February, the Delhi government had notified the 20 per cent reduced circle rates for land and immovable properties to boost transactions in real estate.

"The Delhi Government has reduced the Circle Rates, effectively it is a similar 'positive' for real estate in Delhi, similar to the impact of stamp duty reduction in Maharashtra. Obviously, it will have a positive effect on real estate sales in Delhi besides boosting sales in Delhi's luxury real estate market.

The NCR extends beyond the State of Delhi; so, once the relevant States, Rajasthan, Haryana and Uttar Pradesh, reduce stamp duty rates, we should see similar upsurge in sales across the NCR," Dr Hiranandani told Bizz Buzz.

On changing consumer preference in the last decade and what awaits luxury home segment in the coming years, the real estate apex body expert said Tier 2 cities are also likely to enjoy availability of luxury homes in the future.

"In the recovery phase following the Covid-19 pandemic, luxury real estate has also received a boost in terms of various moves by authorities, as also the market scenario during the recovery stage. It needs to be understood that even before the pandemic struck, luxury housing moved on different set of norms as compared to say, affordable housing or commercial spaces,"

The real estate sector is experiencing an all-time high in India, with rate of interest for housing being at the lowest as well as Maharashtra government's latest decision to reduce the stamp duty charges up to 3 per cent from January 1, 2021 to March 31st, 2021. However, other States are yet to reduce stamp duty charges as revenue loss is a possible outcome for State governments.

On the latest decisions on stamp duty, Dr. Hiranandani believes that the call on this policy needs to be reviewed by State governments keeping in mind the revenue generation it might bring in.

"In the post-Covid-19 era, where revenues have been severely impacted; it is not an easy call to take for any State's finance and revenue ministry. In Maharashtra, we have a precedent where a similar move had been implemented some years ago, and the actual revenue realized during the reduced rates had been higher than what was being collected at normal rates. So, it was easier for Maharashtra to implement the scheme, and it has been a game changer for real estate in Maharashtra. As the advantages become apparent; we should see other States follow suit," he said.