The Brihanmumbai Municipal Corporation (BMC) region of Mumbai has registered a 10-year high in property registrations for September. This month, the region recorded 7,556 property registration — a 35 percent year-on-year growth when compared to the 5,597 registrations in September 2020.
In terms of revenue, the Corporation has also registered a stellar 186 percent year-on-year increase in collections, thanks largely to a rollback in stamp-duty reductions. This month, the municipal corporation made Rs 516 crore in stamp duty, which is also 13.65 percent higher than September 2019’s stamp duty revenue of Rs 454 crore.
Growth despite no reduced stamp duty
The growth in both registrations and revenue collection — despite the BMC’s decision to not revert to its reduced stamp duty rate of 3 percent till March 31 — is indicative of exceptionally good sentiment in the property market.
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"In addition to the improved market health, the government has also been able to improve revenue collections," said Shishir Baijal, chairman and managing director, Knight Frank India, "The revenue level from property sales is even higher than the pre-pandemic average level, as buyers continued to be active despite the rollback of the stamp duty incentive."
According to data from Knight Frank, the share of homes priced above Rs 1 crore in the number of property registrations for September is about 49 percent — another indication of big-ticket transactions. This share was 30 percent in April and only about 40 percent in June.
Registrations saw hiccups in early FY22
Property registrations were on an upswing in Mumbai between the end of FY21, thanks to reduced stamp duty of just 3 percent — in March, nearly 17,728 homes were registered. However, a slight dip was witnessed in registrations in the subsequent quarter, with April and May accounting for a mere 10,136 and 5,360. However, even those numbers were healthy when compared to the previous year that saw business brought to a near standstill on account of the nationwide lockdown.
Since the month-on-month decline in the number of transactions, several developers have called upon the Maharashtra government to intervene in reducing stamp duty to pre-FY22 rates, but in vain. Only a month ago, NAREDCO national chairman Niranjan Hiranandani told CNBC-TV18 that it would make political sense to reduce stamp duty.
"The government is making more revenue from stamp duty now. Maybe that is why they do not want to reduce the rate," said Hiranandani, "But it makes political sense to reduce it, and with municipal elections next year, we could expect another reduction."
Irrespective of that prospective reduction in rates, analysts say positive trends in property registrations and demand are likely to continue. "With the upcoming festive season, the market is gearing up for new project launches to benefit from improved demand," said Baijal, "Given the prevalence of conducive demand drivers, sales momentum is expected to remain strong."
(Edited by : Jomy Jos Pullokaran)