The new Model Tenancy Act 2020, which is currently under discussions at the Centre, aims to bridge the trust deficit between tenants and landlords by clearly delineating the obligations of tenants and landlords. This will give a thrust to the rental sector and will help create a rental housing stock, which would enable students, professional as well as migrant population find accommodation easily and will open up the rental housing market, freeing up unavailable stock which will be make thousands of locked houses in Mumbai available on rent. This will enable rationalisation of prices and will lead to a win-win situation for all.  A survey showed that approximate 30 to 35 % of the population staying in any metropolitan city do not belong to that city and have no intentions of buying a property. This shows that they only want to stay in the city for work and hence to rent out a property. This is one third of the housing demand for the city and therefore this entire market is being neglected. A report by Savills India, released in August 2020, had said that “Driven by rapid urbanization, migration to cities and the rising cost of home ownership, rental housing in India is likely to see a boom in the next two years.”

MMR has emerged as one of the most buoyant residential markets in 2021. According to reports, 18000 property registration were recorded in the quarter ending March 2021 on account of stamp duty reduction by the Maharashtra Government. According to a research done by ANAROCK, the region witnessed the highest decline of almost 8% in total unsold inventory by the end of this quarter. Further, The report also stated that the overall stock fell despite ample new supply hitting the market during this and the preceding quarter.

To elaborate the same, Anuj Puri, Chairman, ANAROCK Property Consultants said, “Mumbai is one of the most expensive real estate markets in the world. A reduction in overall acquisition cost by anything between 5-15% made a huge difference in buyer sentiments. Low home loan interest rates and developer discounts, and timely intervention of the government byways of stamp duty reductions and a 50% cut in premium charges also helped the region get its mojo back even during Covid-19.”

The impact of the growing infrastructure and improved connectivity is also one of the main reasons behind this. The proposed Kanjurmarg site for the Metro depot too will become perhaps the city’s biggest Metro hub if materialised. Post the completion of the multiple metro rail lines in the region, connectivity and access improve significantly. The central suburbs of Mumbai have excellent connectivity with the business districts of Thane, Powai, Andheri, Airoli and BKC as well as South Mumbai via LBS road, JVLR, Eastern Express highway, SCLR and the Eastern freeway. The stretch from Vikhroli to Mulund has an edge over other locations due to the presence of high-end residential complexes loaded with state-of-art modern amenities and facilities. It holds the three aces of accessibility, affordability, and appreciation potential consolidated with good social infrastructure and workplace hub integration.

Real estate will survive and thrive as an asset class in the post covid era. After agriculture, once may witness a surge of growth in this sector. The residential sector contributes to 5% of India’s total GDP creating opportunities for both skilled as well as unskilled workers which attract large masses of migratory populations from tier 2 and tier 3 cities to metropolitan cities for work. The construction sector employs approximately 90% of the workforce employed in real estate in construction.

Due to an all-time low home loan interest rate, it is become that much easier to invest in a residential property and in addition to the reduction in the RERO rate announced by RBI, the conditions are very favourable also for the end users to buy their dream home. Another factor is the depreciation of the India Rupee against other currencies, which makes it more lucrative for NRIs to invest. Experts do believe that there is no further room for correction in the property prices and with developers are working with low margins. However, despite all this, they are still providing a 5-10% price cut to enhance cash flows. This will make way for an overall robust scenario and give a boot to the Real Estate segment which will result in prices to rise eventually.

Another factor is that with trusted AAA rated developers who are nearing completion of their projects, their stocks are being sold almost at will and they are often dealing with multiple offers on the same unit. However, this is in a few projects, as the economy improves, this competition will further escalate and will make finding of their home more unmanageable and out of reach. We have started noticing a shift in this market where the buyer is ready to pay a premium for a good project which is nearly completion with a known and branded developer. At this stage the buyer is more concerned about the quality of the project, reputation of the developer rather than the market price.

The best time to buy real estate is when the market is pressed. Due to the pandemic, the present-day situation is ideal and offers a rare opportunity for any buyer to pick up his dream home. RBI has bought the repo rate at a five year low of 5.4% triggering a reduction in the interest rates from Banks on home loans, coupled with the softened rates offered by developers, it is an ideal time to invest or buy a property for the end user as well as the investor. Also, an abundance of choices will be available to them by most of the developers with very attractive payment schemes.

Considering the present scenario, after taking all factors into account, one would expect the market conditions to remain same or soften during these testing times. However, we have witnessed a surge in the sales and have seen flats been sold at astronomical never seen before prices. For this, one must dwell into the minds of a buyer, it can be observed that today’s buyer is ignoring the market sentiments or any notions of the ongoing price per sq. ft in that area if he likes a particular project. A report by CRE MATRIX 2020, showed that during the year 2020, the top ten developers in south Mumbai alone sold stock of Rs. 3000 Cr collectively, thus breaking all myths about the crumbling of the Real Estate Sector in a COVID world.

Also, who would have thought that during the pandemic, areas like upper Worli and Prabhadevi would have fetched Rs 70,000 to 100,000 per sq. ft on Carpet area with some projects having sold out most of its premium stock prior to its expected timelines. There is also a fear psychosis in the minds of the buyer of being left out due to unavailability of their short-listed home, so this has led to a price war and has resulted in an increase in prices.