Record spree: Mumbai sees sale of 11,744 properties despite govt raising stamp duty and ready reckoner rates from April 1

NEW DELHI: Mumbai city (MCGM area) saw property sale registrations of 11,744 units in April 2022, contributing over Rs 738 crores to Maharashtra’s revenues. The number of units registered in April 2022 resulted in state revenue collections surging to a 10-year high, surpassing April 2021’s collection of Rs 514 crore. April 2022 recorded a growth of 43% YoY, when the effective stamp duty rate was 1% lower. This rush is primarily because buyers advanced property purchase to save the metro cess levy that kicked in on April 1. Consumers moved their purchases forward by filing in March 2022 while registering them in April 2022, effectively saving on the 1 percent metro cess on their deals .

82% of property registrations executed in April 2022 were filed in March- 2022 at effective stamp duty rate of 5%. While 17% of properties registered in April 2022 were filled in April 2022 having an effective stamp duty rate of 6%, shows data analyzed by property consulting firm Knight Frank.
At least 55 percent of registrations were of properties priced over Rs 1 crore while in terms of apartment size, mid-sized homes (ranging between 500-1000 sq ft) were the most preferred category. The same month last year reported property registrations of 10,136 units.
The focus remained on residential properties with a ticket size of Rs 1 crore and below, which made up 45 percent of residential property registrations in April 2022. Property sales of Rs 1 crore to Rs 2.5 crore had a contribution of 39 percent while those in the Rs 2.5–5 crore bracket had a contribution of 10 percent. Residential properties above Rs 5 crore contributed to 5 percent of the total home sales in April 2022.

April 2022 and 2021 were preceded by record-high March months. While March 2021 gained traction after it marked the end of stamp duty waiver of 3%, March 2022 saw higher sales as it was the last month before the introduction of additional 1% metro cess.

“It is heartening to see the continuous momentum of property sales, which has helped April 2022 register a decadal best performance for its corresponding months. The state government has continued to gain in terms of revenues. Even while outflows towards property purchase have increased due to metro cess, other factors like prices, home loan rates, household income and savings, financial security etc. have remained stable, encouraging buyers to conclude their purchases. We expect these sentiments to continue despite cautions of rising inflation and geo-political challenges, as home ownership is considered a safety net against such challenges, “said Shishir Baijal, Chairman & Managing Director, Knight Frank India.
Data from Knight Frank also showed that 46% of home buyers in April 2022 are in 31-45 years age bracket. 46-60 years category has a share of 31% in April 2022. 10% home buyers are under 30 while 13% are over 60.
Western suburbs, followed by central suburbs, drove demand in the Mumbai market. The shares of central Mumbai and south Mumbai have gone up to 7% and 6%, respectively, in April 2022. The share of western suburbs has also risen to 62% from 51% in March. Central suburb saw a drop in the share of property registrations from 38% to 25% in April 2022.

83% of sales were in the up to 1,000 square feet housing segment
Homes of 500-1,000 sq ft continued to be the preference, accounting for 47% of the total registrations in April 2022, followed by compact homes of up to 500 sq ft with 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 incentivize affordable housing segment. Homes of 1,000-2,000 sq ft accounted for 15% of total registrations.
Buyers prefer buying property in their current micro-markets
In April 2022, Mumbai consumers demonstrated an inclination to purchase homes within their current micro-market location. Out-of-city buyers showed interest in purchasing residential properties primarily in the western suburbs
Buyers in the central and western suburbs showed a strong preference for properties in their own micro-market with 88 percent of those in the central suburbs and 86 percent in western suburbs opting for their current location while purchasing new property.
“As anticipated, the realty sector’s growth was not a reaction to favorable incentives, but long-term and sustainable. Despite retraction of stamp duty concession and other offers and rise in input costs, the sales trajectory is moving upward. Residential sales in Mumbai witnessed the number to be strong despite the state government policy modifications starting from April 2022. The government revenue from property registrations rose 16% Year-on-Year (YoY). The Luxury residential segment observed strong growth with the share rising to 39% in April 2022 in total share of sales. We expect this segment to drive sales activity and witness renewed investor interest, fueled by the anticipated appreciation in capital values ​​and increased activity by HNIs and NRIs, “said Ram Raheja, Director, S Raheja Realty.

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