The Mumbai BMC region (i.e. Churchgate to Dahisar and Colaba to Mulund) recorded property registrations of 7,857 units in June 2021, registering a growth of 47% Month-on-Month (MoM) over May 2021 and up 327% YoY compared to 1,839 units registered in June 2020. The registrations for June 2021 were also 39% higher compared to the same month in the pre-pandemic period of June 2019, according to Knight Frank India.
Even though the duration of lockdown in Mumbai was similar to last year, the pick-up post the gradual easing of restrictions was sharper this time around compared to last year.
The Maharashtra State Government in December 2020 had given a leeway of four months to homebuyers to register a piece of property after the payment of stamp duty in order to prevent crowding of registration offices. This ensured that homebuyers who had purchased residences and paid stamp duty on or before 31st March 2021, have maximum window of 4 months till 31st July 2021 from the respective date of payment of stamp duty for registering their apartment. Before this leeway was permitted, for over 95% of registrations in the recent years, the difference between date of payment of stamp duty and date of registration was less than 10 days and for less than 2% of the registrations, the difference was over 30 days.
Delving deeper into the property registrations data, it was noted that 42% of registrations in June 2021 were from new residential sales concluded in the month, recording a sharp improvement compared to 29% during May 2021 and 7% during April 2021. At 3,300 units, the number of new apartments sold (fresh sales) during June 2021 was more than double compared to 1,554 units sold in May 2021 and 348% higher compared to 710 units sold during April 2021.
Property Registrations (2020-2021)
Source: Maharashtra Govt- Dept. of Registrations and Stamps (IGR); Knight Frank India Research
Note- NA- Not applicable as sales in April 2020 were 0
Share of women homebuyers in new sales improves from 1.8% in May 2021 to 4.7% in June 2021
On the 8th March 2021, to celebrate the International Women’s Day, the Maharashtra Government had announced a 1% rebate in stamp duty for women homebuyers effective from 1st April 2021. As a result women homebuyers constituted 6.6% of new home sales in the month of April 2021 paying a discounted stamp duty rate of 4% over their purchase. In May 2021, the share of women homebuyers across the 5,360 units registered in May 2021 dropped to 1.7%. In June, the share of women homebuyers across the 7,857 units registered increased to 4.7%.
Upon assessment of sales and registration data since September 2020 – March 2021, it was observed that during the period of reduced stamp duty, new home sales for that month in mid to premium categories, those costing Rs 1 crore and above, formed a significant part of registrations as lower stamp duty rate on high value housing led to substantial absolute monetary saving for the buyers. However, since the withdrawal of the sop on stamp duty, the scale has tilted in favour of homes costing Rs 1 cr or below, with this category taking more than 60% of sales in the April-June 2021 period.
This should be seen as a positive indication of the strength of demand from end users in this relatively affordable segment that continues to purchase despite no stamp duty relief. Going forward, as the vaccination programme gains momentum and normality returns, sales momentum is likely to gain pace led by demand from the affordable and mid segment.
Commenting on the same, Shishir Baijal, Chairman & Managing Director, Knight Frank India, said, “Despite the second wave of pandemic being severe than the first wave and lockdown duration as well as intensity being similar, there is a stronger growth in property registrations post easing of lockdown restrictions compared to last year. The recovery indicates a fundamental shift in homebuyers’ behavior towards owning a house, an aspiration which had taken a backseat due to the ‘uberisation culture’ of recent years.”
This shift in behavior was complemented by other factors such as lowest ever home loan rates, discounts offered by developers, extended time spent indoors and demand for larger homes, to name a few. “We are hopeful that this recovery will sustain, and the momentum will improve further keeping pace with improved vaccination and economy revival. At this juncture, a demand stimulant from the government can ensure the sustainability of this recovery momentum,” he added.