March 5, 2022

Beating pandemic blues, Mumbai hit a new 10-year high in property

Beating pandemic blues, Mumbai hit a new 10-year high in property stamp duty collection for the month of January, generating over Rs 477 crore through more than 8,100 transactions.

Though the number of property registrations were down 20% from a year ago, revenue jumped 56% year-on-year, according to data from Maharashtra’s Inspector General of Registration. Notwithstanding the drop, the January 2022 registration volume was higher than all pre-Covid January months.

Last year, the same period had a lower stamp duty rate window at 3% and it was not as severely inflicted by Covid.

“Albeit in a limited way, caution on account of the third wave has influenced sentiments, which is reflected in January registrations,” said Shishir Baijal, CMD at Knight Frank India. “However, as previously experienced, we see this slowdown as a temporary blip and the market will gain momentum as the rate of infection declines.”

Apartments spread over 500 sq ft accounted for 60% of all residential property sales in Mumbai despite a government announcement abolishing property tax on houses smaller than 500 sq ft. The 500-1,000 sq ft housing segment accounted for 45% of all sales in January.

“Despite the third wave of the pandemic, both enquiries and the conversion of those into actual sales continued to show an uptrend in January,” said Kamal Khetan, CMD at Sunteck Realty. “Site visits during the first half of the month were lower, but the digital platform helped in taking the deals and negotiations ahead without wasting time until the site visits improved. Both the affordable housing and premium segments have reported steady growth. “

Sunteck Realty has reported a 29% jump in pre-sales worth Rs 352 crore for the quarter ended December. The listed company has reported 23% on-year growth in nine months’ pre-sales at Rs 800 crore.

The western and central suburbs of the city continued to dominate the Mumbai market. The western suburbs was the most prominent market, accounting for 52% of the registrations in January 2022, while the central suburbs accounted for 34%.

“Over the next fortnight, the Union Budget and monetary policy actions will be crucial in catalysing latent demand, and we remain hopeful that the government and the central bank will continue with their growth-oriented policies,” Baijal said.

Experts say with the Reserve Bank maintaining its stance on low interest rates and developers making attractive offers, the sales trajectory has picked up again, with monthly sales surpassing even the pre-pandemic levels seen in 2018 and 2019.

he Mumbai property market has been buzzing with activity since the state government announced a reduction in stamp duty rates in 2020 to boost the real estate sector and around 260 connected industries.

The reduced stamp duty has led to a surge in the number of transactions across segments, including luxury, mid-income, and affordable housing. While the lower stamp duty benefit window period ended in 2020, the property markets across key cities in Maharashtra are still witnessing robust activity.

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