Despite COVID-19, real estate sales in Mumbai have grown by almost 35 percent year-on-year in October indicating the massive pent-up demand among end-users to buy property and clearly suggesting that the state government's decision to reduce stamp duty is finally showing results, says a study by Propstack, a data analytics firm.
The number of registrations in February 2020 just before the lockdown was 5,927. In March the number dwindled to 3,798 and was zero in April. When the registration offices reopened in May, the number of registrations gradually climbed to 207 and were at 1,839 in June, 2,662 in July and August and 5,597 in September. The number has touched 7,929 in October due to the festive season and the discounts available in the market.
The number of registrations in October 2019 was 5,811 indicating that the sales volume has increased by almost 30 percent, the study said.
"This is an increase of almost 30 percent compared to pre-COVID levels and an almost 25 percent increase compared to October 2019. This clearly indicates that a combination of factors is at work this festive season - a discount of 5 to 15 percent by developers, stamp duty reduction by the state government and low interest rates," Sandeep Reddy, co-founder at Propstack, told Moneycontrol.
These numbers in October indicate a strong recovery which is the fourth-highest monthly registrations in terms of volumes and value since April 2013, he told Moneycontrol.
The study also said that the stamp duty cuts have led to lower stamp duty collections. The total stamp duty collection in February 2020 was Rs 438 crore which fell to Rs 305 crore in March after the lockdown was imposed.
This number touched Rs 214 crore in July and Rs 176 crore in August after the government decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent on August 26, 2020, until December 31, 2020, to boost the stagnant real estate market hit by COVID-19. The stamp duty collection stood at Rs 181 crore in September 2020 and Rs 233 crore in October 2020. It was Rs 443 crore in October 2019.
The Propstack survey also said that the home sales value was 30 percent higher than pre-COVID levels. If the value of homes was Rs 8,750 crore in February, it was Rs 6,098 crore in March 2020 just before the lockdown. In June this number went up to Rs 3,064 crore, Rs 4,286 crore in July, Rs 3,528 crore in August and finally it touched Rs 9,025 crore in September.
This month the number touched Rs 11,640 crore compared to Rs 8,852 crore in October last year, the survey said.
The Propstack survey also stated that the average ticket size of a unit in Mumbai was at around Rs 1.5 crore in October 2020.
In order to boost the stagnant real-estate market hit by COVID-19, the Maharashtra government, on August 26, decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020.
It should also be noted that the last two months have seen a slew of high-end properties getting registered in the city. On September 21, lawyer Cyril Shroff and his daughter Paridhi Karan Adani, who is Gautam Adani’s daughter-in-law, jointly bought an uber-luxury unit in Mumbai’s Worli area for Rs 36.3 crore. The unit, located in 360 West by Oberoi Realty, is spread across 583.53 sq m. It is registered under the name APC Benefit Trust.
On September 29, another property located in the 360 West project, worth Rs 42.5 crore, was registered. The size of the property is 699.56 sq m. A property worth Rs 50.5 crore in the same project was registered on September 2. The size of the unit was 730.02 sq m.
Similarly, a property worth Rs 39 crore, located in Carmichael Residences by Peninsula Land in Tardeo was registered on October 9. The unit is 3,185.68 sq ft. It has been reported that the property located in South Mumbai’s Carmichael Road has been bought by Anurang Jain, managing director of Endurance Technologies.