The second wave of coronavirus pandemic notwithstanding, property registrations in Mumbai have swelled to 17,091 as the unprecedented rush among the homebuyers continued in the backdrop of all-time low home loan rates, attractive price discounts and reduction in stamp duty charges.
Real estate experts said that the number by end of day may touch 18,500 which is almost 95 percent of the sales registrations in December 2020.
On August 26, the Maharashtra government had announced to cut stamp duty on housing units from 5 percent to 2 percent until 31 December, 2020. From January 1 to 31 March, 2021, the stamp duty charges were reduced to 3 percent.
On the occasion of Women’s Day, the Maharashtra government announced a 1 percent cut on stamp duty charges if the transfer of house property or registration of sale deed is in the name of a woman.
According to data available on the website of department of registration and stamps, 19,600 properties were registered in MMR in December 2020; the number touched 10,442 in January 2021 when stamp duty was at the rate of 3%; February witnessed 10,198 registrations and there were 17,091 properties registered until March 30, 2021.
“March 2021 sales are likely to touch 18,500 by end of day today,” says the confident Abhishek Kiran Gupta, CEO and co-founder at CRE Matrix, a real estate intelligence firm.
“This is almost at 95% of the December numbers. This is on expected lines as people are rushing to register their properties for fear of losing out on the opportunity. The government has also provided an option to pay stamp duty now and register in April. This is expected to have a spillover impact in April. The months of May, June and July are likely to witness a lull as the monsoon season nears,” he told Moneycontrol.
Another report by Knight Frank India has said that as many as 12,696 property units were registered in Mumbai in the month of March 2021 at a daily rate of 529 units which is nearly 4.3 times higher than the daily rate of registration recorded at 123 units in March 2020. This data is for the period between March 1 to March 24, 2021.
The sales particularly peaked in the last few days of the month with the daily rate of new registrations increasing to 707 units between March 15 to 24, 2020. At the current pace, the month of March 2021 can witness sales upwards of 17,000 units, it said.
The sales in March 2021 grew 234% YoY over the same month last year, registering the highest YoY growth in the months after the stamp duty cut. While March 2020 noted registrations of 3,798 units, March 2021 saw 12,696 units being registered.
Registrations in the first three months of 2021 have almost reached the halfway mark of full year 2019 and 2020 at 33,280 units, it said.
Knight Frank India, noted that Mumbai recorded a historic surge in property registrations driven by home sales in the last month of the lower stamp duty window that began on September 1, 2020 and closes on March 31, 2021.
The euphoria amongst homebuyers has grown stronger despite the 1 percentage point or 100 bps increase in stamp duty rates effective from January 1, 2021.
In December 2020, the closing month for the first phase of reduced stamp duty, there was a stupendous increase in registrations in the last few days of the month as homebuyers rushed to make the most of the lower stamp duty window of 2%, the analysis by Knight Frank India said.
From December 1, 2020 to December 25, 2020 the daily average of the number of units getting registered in the month of December 2020 was at 585 units. This daily average of registrations nearly doubled at 1019 units in the last week between December 27 to 30, 2020. A similar trend is expected to play out in March 2021 as well, the analysis said.
From September 1, 2020 till date, the total revenue from apartments sales realized by the city exchequer has been over Rs 2,578 crores. When compared to the period before the stamp duty cut, i.e. January 2020 to August 2020 the government had collected Rs 1,756 crores. This can be seen as a clear indication of the strong impact the stamp duty registrations have had on the revenues, it said.
The value of apartments sold in Jan-March 2021 period added to Rs 39,880 crore. Since the reduction of stamp duty rates from September 2021, apartments worth Rs 1.07 lakh crore have been sold. Total value of all apartments sold in full year 2020 was estimated to be around Rs 1 lakh crore surpassing the 2019 mark of Rs 90,769 crores, it said.
"A combination of lowest home loan rates, reduced house prices along with rebates and payment flexibility offered by developers, as well as increased household saving rates, have provided the right growth environment for the residential segment to grow,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India.
Meanwhile, real estate developers have urged the government of Maharashtra to extend the prevailing stamp duty rebate that expires on March 31, 2021 by a year, saying that the move had improved homebuyer sentiment and increased property registrations.
In a letter presented to Balasaheb Thorat, Revenue Minister, Maharashtra Government, CREDAI MCHI, a leading real estate body with over 1800 member developers, had said that the state government must extend the prevailing stamp duty rebate by 12 months until March 31, 2022.It said that the move had “substantially improved homebuyer sentiments and property registrations, led to higher job creation and tax collections for the state. It has created a positive cascading effect enabling the industry to take a lead in the revival of Maharashtra’s economy”.