Reduced realty premiums to generate Rs 10 lakh cr economic activity in Mumbai region, CREDAI MCHI

MUMBAI: The government of Maharashtra decision to reduce real estate premiums by 50% is expected to generate economic activity worth Rs 10 lakh crores in the Mumbai Metropolitan Region (MMR), said the realty developers’ body CREDAI MCHI.This is primarily owing to the significant multiplier effect of the real estate industry on the economy, with over 250 allied industries directly or indirectly dependent on the sector.The developers’ body estimates that the premium reduction will help residential real estate new launches make a comeback in the first quarter of 2021, to almost 100% of Pre-COVID level a year ago.Premiums and approvals attribute to around 30% of project cost according to CREDAI MCHI research, with the move also bound to make housing more affordable for homebuyers in the region. “Maharashtra government’s decision to reduce the real estate premiums by 50% in the state is a monumental decision for not just the real estate sector but also in the bid to revive the state’s economy as different industries try to find their feet in the post-COVID19 era,” said Deepak Goradia, president, CREDAI MCHI. “Reducing the premium for real estate will not only make houses more affordable for homebuyers but it will also make a number of projects more viable for developers – underlining the vast significance of this move.”With a multiplier effect at play, he expects a cascading effect for over 250 industries – providing a fillip to the overall economic activities in MMR and spearheading its revival.MMR has witnessed over Rs 5 lakh crore worth of real estate being sold and registered in the quarter ending 2020, according to CREDAI MCHI research. The last quarter also witnessed a growth of more than 50% in terms of number of units sold as compared to the corresponding quarter of 2019, signifying the increase in demand for residential properties in MMR.
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