Mumbai's home sales volume rose 42 percent from last month to 7,929 units in October 2020, the highest in last eight years, on account stamp duty cut and the festive period of Navratri and Dussehra, said a report.
The registrations in October jumped 36 percent year-on-year (YoY).
This growth in registrations comes after a massive jump of 112 percent month-on-month and 39 percent year-on-year during September, the report titled Mumbai Residential Snapshot October 2020 said.
One of the biggest catalysts for this growth has been the reduction of stamp duty by 300 bps, which has been further matched by developers who have offered to absorb the remainder, thus significantly reducing the total outflow towards new home purchases. The reduction in home loan rates by banks to historic lows helped improve homebuyers’ loan eligibility and also aided sales growth, the report said.
Further, the developers innovated on their marketing prowess to include financial benefits, discounts, and easy payment options to attract buyers during the period of lockdown. Developers were also able to garner buyer interest through the active usage of digital platforms during this period to engage with customers, the report said.
This made families realise the need for having additional rooms in their house and created a demand for upgrading to a larger house which may not have been a necessity earlier. All these measures culminated with the festive season which gave an additional fillip to sales.
Realising that this is an attractive opportunity to buy their dream homes, the fence-sitters also entered the market, it said.
The registration was zero in April this year due to COVID-19 pandemic-induced lockdown, but in subsequent months the number improved to 207 units in May, 1,839 units in June, 2,662 units in July, 2,642 units in August, and 5,597 units in September.
Mumbai has witnessed a cumulative residential sales of 13,526 units after the stamp duty cut during September-October 2020. The monthly run rate in this period after the stamp duty cut is approximately 120 percent or 1.2 times the monthly average of 2019.
It is important to note that even after the stamp duty cut in September, the state government’s revenue collections from stamp duty have increased in October to Rs 2,328 million compared to Rs 1,764 million in August 2020. This shows that the boost to housing sales has more than compensated for lower duty and hence benefitted the state government in terms of revenue collections.
“The growth in sales of residential units has bounced back in MMR region supported by the stamp duty cut by the Maharashtra government. The lowering of stamp duty has helped significantly in stimulating demand especially from the end-user consumers. As end-users are highly discerning, factors like lower home loan rates, reduction in stamp duty along with the incentives provided by developers, have helped buyers realise greater value from their purchases,” Shishir Baijal, Chairman and Managing Director, Knight Frank India, said.“The demand momentum in this market is likely to continue buoyed by the festive demand and recovery in the economy. Those with financial stability during these times, are viewing this period as the perfect opportunity to invest in properties, as entry price is attractive. Further, the tangibility of the asset provides a certain assurance including its availability as collateral for future funding,” the report said.