Mumbai has recorded a historic surge in home registrations driven by property sales in the final month of the decrease stamp duty window that started on 1st September 2020 and closes on 31st March 2021. The euphoria amongst homebuyers has grown stronger regardless of the 1 percentage point or one hundred bps raise in stamp duty prices effective from 1st January 2021, according to Knight Frank India.
From 1st March 2021 to 24th March 2021, Mumbai recorded home registration of 12,696 units at a day-to-day price of 529 units, which is practically 4.3 occasions greater than the day-to-day price of registration recorded at 123 units in March 2020. The sales specifically peaked in the final couple of days of the month with day-to-day price of new registrations escalating to 707 units amongst March 15 and March 24, 2020. At the existing pace, the month of March 2021 can witness sales upwards of 17,000 units.
In December 2020 – the closing month for the initially phase of decreased stamp duty, there was a stupendous raise in registrations in the final couple of days of the month as homebuyers rushed to make the most of the decrease stamp duty window of 2%. From December 1, 2020 to December 25, 2020, the day-to-day typical of quantity of units acquiring registered in the month was at 585 units. This day-to-day typical of registrations practically doubled at 1019 units in the final week amongst December 27 and December 30, 2020. Knight Frank India expects equivalent trend to play out in March 2021 as properly.
From 1st September 2020 till March 24, 2021, the total income from apartments sales realized by the city exchequer has been more than Rs 2,578 crore. When compared to the period ahead of the stamp duty reduce, i.e January 2020 to August 2020, the government had collected Rs 1,756 crore. This can be noticed as a clear indication of the powerful influence the stamp duty registrations have had on the revenues.
The reduction in stamp duty has developed beeline for obtain of properties outdoors registration offices with Mumbai witnessing historically powerful sales. Homes sales have constantly risen month on month in every window. Between the period from September 01, 2020 – March 24, 2021, Mumbai recorded registration of 75,688 units with numbers increasing incrementally month on month in each windows.
The sales in March 2021 grew 234% YoY more than the very same month final year, registering the highest YoY development in the months following the stamp duty reduce. While March 2020 noted registrations of 3,798 units, March 2021 saw 12,696 units becoming registered.
As a direct outcome of the pandemic expertise, property purchasing has enhanced. 2019 saw total sales of 67,863 units, whereas registrations in 2020 have come comfortably close to final year’s level at 65,272 units. Registrations in the initially 3 months of 20212 have nearly reached the halfway mark of complete year 2019 and 2020 at 33,280 units.
The worth of apartments sold in the Jan-March 2021 period added to Rs 39,880 crore. Since the reduction of stamp duty prices from September 2021, apartments worth Rs 1,08,967 crore (1.07 lakh crore) have been sold. Total worth of all apartments sold in complete year 2020 was estimated to be about Rs 1,00,245 crore or (Rs 1 lakh crore) surpassing the 2019 mark of Rs 90,769 crore.
The implied flat worth (typical value of apartment) sold has come down in the months following 1 percentage point raise in stamp duty price, as most of the higher-ticket size apartment obtain occurred ahead of the closure of the lowest 2% stamp duty window, which ended in December 2020. The implied flat worth had reached Rs 1.72 crore (or Rs 17.2 million) in December 2020 and dropped to under Rs 1 crore through January 2021 and steadily rose to Rs 1.41 crore in March 2021 as the momentum extended to the mid segment also through this window.
Commenting on the very same, Shishir Baijal, Chairman & Managing Director, Knight Frank India, mentioned, “The reduction in stamp duty rate has helped mitigate the pain in the long-beleaguered real estate sector of Mumbai. As expected, with the revival of the economy, the sales momentum grew stronger in Q1 2021 and the euphoria amongst homebuyers continued despite the 100-bps increase in stamp duty rates. A combination of lowest home loan rates, reduced house prices along with rebates and payment flexibility offered by developers, as well as increased household saving rates, have provided the right growth environment for the residential segment to grow.”
Shishir additional added, “After several years of anguish, the real estate sector in Mumbai is making an attempt to stand on its feet. However, the rising number of cases in the country and the resultant lockdowns in some cities is threatening to jeopardise this arduous recovery path charted by the sector. It would be immensely helpful if the government extends the window of stamp duty reduction by a few more months till the sector can find its feet and start sprinting again.”