Mumbai (Maharashtra) [India], January 7 (ANI): Real estate experts have hailed the Maharashtra state government's decision to cut premium on real estate projects by half, saying the move will go a long way in expediting project completions.
"The reduction in construction premiums will surely bring down project costs, thereby further reducing property prices across Mumbai to rekindle the buyers' interest to boost sales," said Manju Yagnik, Vice-President of the Nahar Group and Senior Vice-President at industry body NAREDCO.
She said premium for construction of projects is the highest for Mumbai city, and it accounts for over 25 per cent of project cost in some cases.
"The reduction in premium cost will help soften prices and renew buyers' interest. The real estate industry is key to the overall growth of economy. It needs government hand-holding to boost demand and revive growth," said Yagnik.
Rohit Gera, Managing Director of Gera Developments, said the move to reduce the premiums will provide respite to cost burdens for developers, thus spurring on more supply at lower prices.
However, he said, it is important to note that the charges paid for approvals include development charges and other charges. "Effectively, this means the total benefits will be much less than 50 per cent."
After reducing stamp duties in the state to boost residential sales, the Maharashtra government on Wednesday approved the proposal to cut the premium on real estate projects by half till December 31.
Developers availing of the scheme will have to pay full stamp duty and registration charges on behalf of homebuyers. (ANI)