Sale of housing properties at 9-year high in Mumbai during November; Here's why

File pic: Zee News

Mumbai: The sale of residential property in Mumbai has recorded the highest-ever registrations in the month of November over the last nine years. A total of 9,301 units were registered in the metropolitan city last month, according to Knight Frank India, a leading international property consultancy.

The figures show a 67% year-on-year (YoY) rise over the same month last year. This strong growth of 17% month-on-month (MoM) in November 2020 comes after a robust 42% MoM growth during October 2020 and massive 112% MoM growth during September 2020, as sales of residential property started showing an upward trend after a slump due to the COVID-19 induced lockdown, said Knight Frank India.

The upward trend in sales is being attributed to a stamp duty cut of 300 bps (basis points). Most developers have offered to absorb the remaining 200 bps which is resulting in huge savings for the homebuyer. This is in addition to the festive season of Diwali and the reduction of the home loan rate to historic lows.

Mumbai has witnessed a cumulative residential sale of 22,827 units after the stamp duty cut during September-November 2020. The monthly run rate in this period after the stamp duty cut is approximately 135% or 1.35 times the monthly average of 2019.

Shishir Baijal, Chairman and Managing Director, Knight Frank India said, "Limited period stamp duty cut continues to remain the biggest catalyst for residential sales in Mumbai. The sales were also augmented by the festive period, lowest ever home loan rates, and incentives extended by developers. The proactive step by Maharashtra Government has instilled confidence in the housing sector which had been faring low for the past few years. Improvement in the real estate sector will help recuperate economic growth and aid faster recovery from the crisis.”

“The demand momentum in this market is likely to continue till the end of the year buoyed by the low stamp duty regime. As income streams are coming back to normal, we believe that more buyers will come to the market before the end of the financial year to make most of this opportune time to buy their dream homes,” Shishir added.

Notably, even after the stamp duty cut in September 2020, the state government’s revenue collections from stamp duty have increased to Rs 2,328 million in Oct 2020 and Rs 2,879 million in November 2020 and compared to rs 1,764 million in Aug 2020. 

This shows that the boost to housing sales has more than compensated for lower duty, benefitting the state government in terms of revenue collections.