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Property registration in Mumbai jumps 51% MoM in March to over 15,000 units

Registrations contribute to over Rs 1,000 crore to the state exchequer; They have picked up pace due to the impending 1% metro cess that shall be levied effective April 1, 2022.

Mumbai city

Mumbai city

Mumbai saw property sale registrations of 15,717 units in March 2022, contributing over Rs 1,084 crore to the state exchequer.

March 2022 got some of its pace due to the impending 1% metro cess that shall be levied effective April 1, 2022, in the cities of Mumbai, Thane, Navi Mumbai, Pune, Nashik, and Nagpur, said an analysis by Knight Frank India.

Mumbai city saw total property sale registrations of 9,805 units in February 2022, a drop of 4 percent compared to the same period last year. As many as 10,172 units were registered in February 2021 when the lower stamp duty rate window of 3% was available.

March 2022 was also the third-best performance for March in the last ten years. March 2022 recorded 51% month-on-month (MoM) rise in property registrations over February 2022. However, the registrations were lower by 11% on a year-on-year (YoY) comparison over March 2021, the analysis said.

Maximum registrations were in the price band of Rs 1-5 crore while in terms of apartment size, mid-sized homes (ranging between 500-1000 sq ft) were the most preferred category of property registered in March 2022.

At 15,717 properties, property registrations in March 2022 were the best monthly volumes achieved in the last 12 months. The earlier peaks were achieved in the months of December 2020 and March 2021 with 19,581 and 17,728 units registered, respectively, both within the period when stamp duty incentive was applicable, it said.

As previously noted, months preceding any upward revision of the stamp duty have seen accelerated activities in the registration of properties as buyers rush to take advantage of the lower rate.

“The financial year will close on a high note for the Mumbai property market as March 2022 records Rs 1,084 crore of revenue for the state exchequer. Strong demand and a catalyst, such as the impending metro cess from 1st April 2022, have motivated buyers to hasten their purchase decision. It is heartening to see that the residential market in Mumbai has maintained its pace for a significant period after the demand stimulants have been withdrawn. We firmly believe the latent demand will remain strong, backed by low home loan rates and stable home prices,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

“The change in stamp duty structure, as well as the rise in input costs and an upward trend in retail inflation, are worrisome. These can pose challenges for the sustenance of this demand, especially from end-users. We hope that the state government will take constructive measures to ensure the sector can remain buoyant in the future,” he added.

The daily average for property registrations was recorded at 507, the highest in the last 12 months. The latter half (16 – 31 March 2022) of the month recorded a higher daily registration rate of 593 as compared to the daily registration rate of 415 recorded between March 1-15, 2022. This increase in momentum was due to an impending increase in associated costs of property transactions.

Additionally, increase in raw material cost due to the existing geopolitical pressure is also steering the consumer sentiment, which anticipates a cascading effect on prices.

Western Suburbs continue to dominate housing sales

Western suburbs, followed by Central Suburbs, dominate the Mumbai market. Central Suburb saw a rise in share of property registrations to 38% in March 2022, higher by 500 basis points over the last month. The share of Central Mumbai and South Mumbai, however, dropped to 5% against the 6% registered in February 2022. The share of Western Suburbs also dropped to 51% from 55% in February 2022 but remains the majority of the registrations.

84% sales concentrated in the up to 1000 sq ft segment

Homes of 500-1,000 sq ft continued to be the preference, accounting for 48% of the total registrations in March 2022, followed by compact homes of up to 500 sq ft bagging a share of 36%. Under 500 sq ft carpet area homes had previously received a government incentive of 100% relief in property tax effective since February 2022 which is expected to further incentivise the affordable housing segment. Homes of 1,000-2,000 sq ft accounted for 13% of total registrations.

Focus on Rs 1 crore to Rs 5 crore segment

Properties with a ticket size of Rs 1 crore and below made up 46% of all registrations in March 2022, dropping from 48% in February 2022. Share of properties with a ticket size of Rs 1 crore to Rs 5 crore on the other rose to 49% in March as against 48% in February 2022. 5% of properties were purchased in above Rs 5 crore segment, it said.

Moneycontrol News
first published: Mar 31, 2022 04:34 pm