Stamp duty cuts will benefit luxury market in Delhi-NCR, says India Sotheby’s CEO

In a webinar, titled Unpacking Delhi NCR’s Luxury Housing Market, organised on the side-lines of the ongoing Delhi Luxury Home Fair 2021 (March 6-21), Amit Goyal, CEO, India Sotheby’s International Realty, pointed out how stamp duty cuts, categorisation and rationalisation will benefit luxury real estate market of Delhi-NCR.

Rahul Bhargava, Jt. General Manager, HDFC Ltd, Ravinder Singh Ahuja, CA, Founder RS Ahuja & Co and Anubhav Jain, CEO, Silverglades Group, also participated in the webinar that focused on the luxury housing segment in Delhi-NCR.

Anubhav Jain said, “Location has become important post lockdown because people are putting emphasis on upgrading lifestyles. They don’t want to travel too much for work and leisure.”

Amit Goyal added that one of the key reasons is not that people want bigger homes, but better homes. “People have started to upgrade not from the perspective of space, but also proximity to their workplace and amenities, ecosystems –if someone plays golf, they naturally look for spaces near IIC and Gymkhana. Recreational activities have become important post lockdown.”

Rahul Bhargava spoke about how things are looking vis-à-vis mortgage offtake and developer funding – “The starting post lockdown was very slow. April-May disbursementwas negligible, but now, we have surpassed our pre-COVID numbers, and we can see this trend will continue.”

Seconding this, RS Ahuja said that “Property prices are at the lowest, rate of interest is also lowest, at a never-before-seen rates 6.5 per cent per annum. This is creating a very attractive and positive environment.”

On the circle rates being cut, Goyal said, “Circle rate cuts only impact certain sections of society. For example, if somebody is sitting on an estate, the market value of the property is much less than the prevailing circle rate there. This has been the case in many areas like Maharani Bagh, Friends Colony, Panchsheel Park, etc, where the market rate is 30-40 per cent less than the circle rate.” So, he said, “it doesn’t impact the demand for the property much, unless the seller is a fence-sitter.”

What would really impact the luxury real estate market, according to Goyal, would be some much-needed policy changes. “In the last 8-9 years, property prices have only come down. So, it’s high time that the circle rates are rationalised now. I wish there is a stamp duty cut, just like how it was done in Maharashtra and some other states. Even internationally, countries such as UK and Malta did the same. Categorisationalso needs to be rationalised, because I have seen that wherever larger plots differential is upto 20 percent, the sellers are motivated. But if the differential is over 20 per cent, they are hesitant to transact.”

On the decision of Haryana Government to increase stamp duty by 2 per cent, Jain said this has put Gurugram at a disadvantage. “Gurugram deals will be hampered, especially in the ready-to-move in property segment, where the buyer has to pay the stamp duty on transaction.”

But Goyal had a more positive outlook – as he said it might not be the only factor impacting real estate deals in Delhi-NCR. “For two decades, people from Delhi have been moving to Gurugram in the search for larger space and more amenities. Gurugram still has a lot of scope for development, and this trend will continue. This raise in stamp duty could impact some people, but it will not be the only buying factor,” said Goyal.