Property registration in Mumbai, the country’s biggest and most expensive real-estate market, continues its record-setting spree. April saw fresh peaks for the Maximum City even after the government raised ready reckoner and stamp duty rates for apartments in the city that’s home to the world’s most expensive private residence in its exclusive southern tip.
The country’s financial capital witnessed the registration of over 11,744 property deals in April, making it one of the highest performances ever, showed data from the Inspector General of Registration, Maharashtra. While registration numbers rose 16% from a year ago, the state exchequer fetched 43% higher revenue at Rs 738 crore, a 10-year high for the month of April.
“Uptick in sales velocity and record high property registrations, even in the absence of fiscal incentives, is an indicator of real sustainable housing demand from end users. Additionally, the stamp duty waiver on capital gains for up to three years has revived investment sentiment in residential real estate,” said Niranjan Hiranandani, vice chairman, NAREDCO National. “The need to arrest commodity inflation is signalled to continue this momentum.”
Interestingly, the performance was driven by mid-income and affordable housing segments that maintained buoyancy despite the state government raising ready reckoner values and stamp duty rates from April 1.
Luxury properties, valued at Rs 10 crore and above, stood at 1% of total deals.
“Even while outflows toward property purchases 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,” said Shishir Baijal, CMD, Knight Frank India. “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.”
Homebuyers’ focus remained on properties with a ticket size of Rs 1 crore and below, as indicated by 45% of registrations in this segment. Properties priced between Rs 1 crore and 2.5 crore contributed to 39% of total deals, while Rs 2.5-5 crore contributed 10%. Homes above Rs 5 crore contributed 5% of the total residential deals during the month.
Homes with a size of 500–1,000 sq ft continued to be the preference, accounting for 47% of the total registrations, followed by compact homes of up to 500 sq ft with a share of 36% during the month.
Under 500 sq ft of carpet area, homes had previously received a government incentive of 100% relief in property tax with effect from February 2022, and this is expected to further incentivize the affordable housing segment. Knight Frank India data showed that homes of 1,000-2,000 sq ft accounted for 15% of total registrations.
Many homebuyers advanced their purchases by filing in March while registering them in April, effectively saving 1% metro cess on their deals. With effect from April 1, the state government has announced an average increase of 5% in the ready reckoner rates for properties across Maharashtra.
The highest increase will be in the Thane municipal limits, at an average of 9.48%, while rates in greater Mumbai were increased by 2.34%. In addition to this, the government has also implemented a 1% metro cess on stamp duty in Mumbai, increasing the cost of property acquisition in the city.
Mumbai has been setting new benchmarks in property transactions lately after the state government announced a limited-window stamp duty reduction.
The significant but limited-period stamp duty reduction window that ended on March 31, 2021, was a catalyst for the city’s residential market. While stamp duty rebates are not available now, the deals have continued to flow in.