by THO
Mumbai’s real estate market is one of the costliest in the country, with high-end deals concerning homes priced anywhere from ₹4 crore to more than ₹100 crore making the headlines. Having said that, the majority can afford homes in the range of ₹1 crore to ₹2 crore in the suburbs.
While the costliest localities in Mumbai include Bandra, Worli, Lower Parel, Malabar Hill, Peddar Road, and Marine Drive, the most affordable areas where the per sq ft prices range between ₹20,000 per sq ft and ₹35,000 per sq ft are Dahisar, Borivali, Kandivali, Malad, Mulund, Bhandup, and Vikhroli.
If a homebuyer has a budget of ₹1BHK for buying an apartment worth ₹1 crore in Mumbai, he would need a corpus of at least 10%to 20% of the total cost of the unit to meet other expenses associated with purchasing a house.
According to experts, homebuyers need at least ₹10 to ₹20 lakh to purchase a ₹1 crore apartment in Mumbai, provided that banks fund the purchase.
Also Read: Why are up to ₹2 crore properties the most preferred in the Mumbai real estate market?
“Banks usually fund 90% to 95% of the agreement value as a home loan. However, there have been cases where even 100% of the agreement value has been disbursed as a home loan. There are other costs such as stamp duty, registration fees, development charges levied by a developer and GST in case the project booked is under construction that have to be factored in while purchasing a house,” said Sandeep Doshi, a real estate consultant in Mumbai’s western suburbs that registers highest number of property registrations in Mumbai.
“The bank generally funds the agreement value for the house purchase, and homebuyers must spend the money on taxes from their own pocket. Hence, to purchase a 1 BHK apartment worth ₹1 crore in Mumbai, homebuyers will have an additional ₹10 to ₹20 lakh in hand,” Doshi added.
Homebuyers must factor in taxes that must be paid at the time of purchase.
In Maharashtra, the current stamp duty slab is between 5% to 7% of the total agreement value. A homebuyer may have to spend between ₹5 lakh and ₹7 lakh to purchase a ₹1 crore apartment as stamp duty. The government offers women homebuyers a 1% discount on stamp duty.
The homebuyer also has to consider registration fees, which cost ₹30,000. In the case of under-construction projects, homebuyers will also have to pay 5% GST at the time of purchase. However, if the project has received an occupation certificate (OC) or, in the case of secondary sales, GST is not levied at the time of purchase.
“If the ₹1 crore apartment is under construction, the buyer must pay ₹6 lakh towards stamp duty, ₹30,000 as registration fees, and ₹5 lakh as GST. Additionally, one should factor in ₹4 lakh as petty cash that might be required for shifting and setting up the house, including the legal or documentation charges for the above purchase,” said Vikram Mehta, a real estate consultant based in Mumbai’s Andheri.
Therefore, a buyer should set aside ₹10 to ₹20 lakh to purchase an apartment worth ₹1 crore in Mumbai.
Also Read: Mumbai real estate market: 5 luxury apartment deals that cost ₹100 crore and above
Mumbai property registration data
The Mumbai real estate market registers around 10,000 properties every month, of which around 80% account for residential property registrations, according to Knight Frank India, a real estate consultancy firm.
Out of the total properties registered in Mumbai, on average, around 75% to 80% of the properties are registered in the up to ₹2 crore slab, followed by 10% to 15% worth ₹2 crore to ₹5 crore and the balance in the above ₹5 crore bracket.
