Mumbai city (BMC area) saw property sale registrations of 8,149 units in August 2022, contributing over Rs 620 crore to the state revenues, according to data from the Maharashtra government’s Department of Registrations and Stamps (IGR).
Property sales registration recorded a 20 percent rise year-on-year (YoY) in August 2022; however, it was a drop of 28 percent month-on-month (MoM) mostly due to the strong property sales registrations in July 2022.
This is primarily on account of the rise in repo rate of 140 bps, leading to an increase in home loan rates, and the increase in stamp duty which has impacted buyer sentiments.
As much as 60 percent of all registrations in August 2022 were in the price band of over Rs 1 crore while in terms of apartment-size homes, between the size of 500 and 1000 sq ft were the most preferred in this month.
The state revenues from property registrations grew 47 percent YoY at Rs 620 crore in August 2022, said an analysis by Knight Frank India.
The state government earned a revenue of Rs 620 crore, surpassing August 2021’s collection of Rs 421 crore on account of higher property registration volume, increased contribution from higher value segment and one percentage point higher stamp duty rate. Even though the property sale registrations grew by just 20 percent YoY, the government revenue collection has grown by 47 percent YoY.
The month of August traditionally records an MoM drop in property registrations; however, August 2022 was the best performing August month in the last 10 years. In the last 10 years, 8 out of the 10 August months have recorded an MoM drop in property registrations, August 2018 and 2019 remain an exception to this, recording an MoM rise of 7 percent and 2 percent respectively, noted Knight Frank India, a real estate consultancy.
With imminent inflationary pressures, the RBI has made three consecutive repo rate hikes amounting to 140 basis points in a short duration from May 2022 to August 2022. The anticipation of a rate hike in August had driven July 2022 number to a peak, post which August 2022 has seen a slowdown in registrations.
Consumers are now expected to remain cautious while purchasing property in anticipation of additional rate hikes effectively leading to a rise in mortgage rates impacting their affordability. However, it is too early to gauge the impact of repo rate hikes and if the consumer sentiment is affected by the same, the consultancy said.
“August has historically been a slower month, recording a month-on-month decline in eight out of the last ten years. The rise in repo rate of 140 bps, leading to a rise in home loan rates, and the increase in stamp duty has had its impact on buyer sentiments. Despite that, Mumbai’s home sales momentum has remained comparatively buoyant and recorded a 20 percent growth over the same period last year. It may hence be too early to assess if the impacts of these rate changes on housing sales are long term. Further, homebuyer sentiments are expected to sustain in the upcoming festive season,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India.
95% of registered properties in August were those bought in the same month
95 percent of all property sales registrations in August 2022 were for properties transacted in the same month. About 3 percent of properties registered in August 2022 were filed in July 2022 and around 2% of these deals were filed in March and June 2022.
85% of the properties registered in August 2022 are residential
Out of all the properties registered in August 2022, 85 percent were residential deals as compared to 86 percent in the previous month, while commercial property deals contribution has gone down from 10 percent last month to 9 percent. Industrial property deals contributed to 1 percent while land deals registered stayed under 1 percent. Other forms of property deals contributed to 4% of the total deals registered in August 2022.
Focus remains on 500–1,000 sq ft area segment
The share of homes ranging from 500-1,000 sq ft accounts for more than half the residential properties registered in August 2022. The share rose from 50 percent in July 2022 to 51 percent in August 2022. Compact homes continue to be the second preference with a share take-up of 32 percent in August 2022. Homes ranging from 1,000-2,000 sq ft saw a share take-up of 16 percent while the share of over 2,000 sqft homes remained unchanged in August 2022 at 2 percent.
Focus shifts to Rs 1-2.5 crore segment
Focus shifts to residential properties in Rs 1 crore to Rs 2.5 crore segment with the rise in take-up from 42 percent in July 2022 to 45 percent in August 2022. Properties with a ticket size of Rs 1 crore and below declined from 43 percent in July 2022 to 40 percent in August 2022. Share take-up in Rs 2.5 crore to Rs 5 crore segment has increased from 10 percent to 11 percent.
47 percent of home buyers in 31-45 years age group
The largest share of home buyers in August 2022 is in the 31- 45 years of age category having a contribution of 47 percemt of the total residential property registrations. Buyers in the age group 46 -60 years have a share of 32 percent, while 12 percent home buyers are under 30 and 9 percent are over 60.
95 percent of registered properties in August were those bought in the same month
As many as 95 percent of all property sales registrations in August 2022 were for properties transacted in the same month. About 3 percent of properties registered in August 2022 were filed in July 2022 and around 2 percent of these deals were filed in March and June 2022.
85 percent of the properties registered in August 2022 are residentialOut of all the properties registered in August 2022, 85 percent were residential deals as compared to 86 percent in the previous month, while commercial property deals contribution has gone down from 10 percent last month to 9 percent. Industrial property deals contributed 1 percent while land deals registered stayed under 1 percent. Other forms of property deals contributed to 4 percent of the total deals registered in August 2022.