Share This Post

Market Updates

Maharashtra Cabinet approves proposal to cut real estate premiums

Maharashtra Cabinet approves proposal to cut real estate premiums

Dr. Niranjan Hiranandani, President NAREDCO

State cabinet approves reduction in premium for real estate projects- While reacting to the breaking news of State cabinet to approve Reduction in Premiums, Dr. Niranjan Hiranandani, President NAREDCO gladly said that, “It is a great bolstering move made by the state government by sealing approval to reduce premiums by 50% under the new DCPR rule 2034 across the board for on-going and new projects upto Dec 312021. This move will go a long way in expediting the project completion and the industry will witness new launches in the market. The industry applauds this booster dose making many projects viable and we shall adhere to the rules laid down in lieu of availing these benefits. Also, the reduction in premiums for new launches will help the development at the lesser input cost and over a period of time there is possibility of lower price for new inventories that shall come into the market.

 “It is a move expected to meet the urgent need for economic activity and generating employment. The industry will be injected with additional liquidity in the backdrop of cumulative policy reforms due to Covid pandemic, which has been considered as a ‘force majeure’ situation by the Government of India. This reduction in premiums will help in quick turnaround of projects and uplifting Industry sentiments.”

Mr. Kaushal Agarwal – Chairman, The Guardians Real Estate Advisory

“It’s the much asked for and required icing on the cake for the real estate sector, especially in the state of Maharashtra. After the steep, temporary reduction in stamp duty charges, the 50% reduction in premium payments until December 2021 will benefit the supply side immensely. It will also help developers pass on further benefits to homebuyers, invigorating demand for real estate projects that are under construction. This move is likely to propel developers to offer extended payment holidays and also give lucrative price proposals to buyers in projects where the inventory has been selling slowly. While the pandemic and subsequent lockdowns made developers focus on completing existing projects and largely postpone launching new ones, this move of halving the different kinds of premiums and levies is going to make developers contemplate going back to launching new projects.”

Mr. Ashok Mohanani – President, NAREDCO Maharashtra

“After the stamp duty cut, Naredco Maharashtra welcomes yet another blockbuster decision of the Maharashtra Government to reduce the construction premium by 50 percent. It will give a big respite to the developers, as the cost of premium as well as approval cost contribute 35 to 38% of the project cost, whereby the project cost will come down substantially. Mumbai alone attracts around 22 premiums which is higher than other top metro cities. Higher premiums put additional financial burden on developers leading to higher costs for the homebuyers. Projects that wish to avail the benefit of concession will have to pay the full stamp duty on the sale of flats, whereby the consumers will get direct benefit of this concession, granted by the state government. The decision will also bring the relatively higher construction premium at par with other states and the lending institutions will find the project funding more viable. It will result in more funding into the State’s real estate sector.”

Mr. Bhushan Nemlekar – Director, Sumit Woods Limited 

“After the stamp duty cut, this decision of the Maharashtra Government to cut premiums by 50% is a masterstroke. This will give a much needed impetus to the real estate industry in the State. We will see a very positive response from the developers and the stakeholders. I feel that even the revenue of the State Government and the Corporation will increase because of this decision. This will also ensure a positive momentum going into the New Year after an effective last quarter for the industry on the back of lower interest rates, reduced stamp duty and festive offers by developers.”

Mr. Abhishek Jain, COO, Satellite Developers Private Limited (SDPL)

”After being hit by the pandemic, the real estate sector has seen a solid recovery on the back of stamp duty reduction and a good festive season. Now this move of reduction in premiums by 50% will help rationalize input costs for the developers and will go a long way in expediting project completion thereby keeping price escalation in control. The industry will also witness new launches in the market attracting investments from institutions. All in all a good move that will sustain the growth of the real estate industry in the coming months.”

Vikas Chaturvedi, CEO of Xanadu Realty

Speaking on the recent announcement, Vikas Chaturvedi, CEO – Xanadu Realty, said, “After a turbulent, tumultuous 2020, the Indian real estate sector is looking at 2021 as the year of healing. In this context, the Maharashtra government’s recent decision to reduce premiums charged on real estate projects by 50% is an extremely welcome move. It will strengthen the supply side, reduce project timelines, and rationalise input costs for developers in the state. Moreover, since the direct benefits are being passed onto the end-consumer, it will stimulate the regional market in Maharashtra by bolstering consumer purchase sentiment and investor interest. We are looking forward to the impact that this development will have in revitalising the real estate market in Maharashtra, as it can provide the template for similar deployments across the country.”

Share This Post

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>