Property registrations Mumbai BMC region was at a 10-year high at 9,037 units in July 2021, registering a sequential growth of 15 percent over June 2021 and a sharp surge of 239 percent as compared to 2,662 units in July 2020.
The registrations in July 2021 were, in fact, 57 percent higher than pre-pandemic levels seen in July 2019, according to a report by property consultant Knight Frank.
“As the economy revives and the lockdown restrictions ease further, with the increase in pace of vaccinations, we expect this momentum to sustain provided we avoid the third wave. The fact that new registrations for the month of July have also shown an encouraging increase over the last few months also bears testimony to the fact that demand for new homes remains intact,” said Shishir Baijal, Chairman & Managing Director, Knight Frank.
Meanwhile, 53 percent of registrations in July were from new residential sales as compared to 42 percent in June, 29 percent during May and 7 percent during April 2021, as per the report.
As soon as the lockdown restrictions were eased, customer site visits were facilitated, and transactions were closed. The July numbers do have some pent-up demand from the preceding quarter.
In December 2020, the Maharashtra State Government had given a leeway of four months to homebuyers to register a 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 March 31, 2021, have a maximum window of 4 months till July 31, 2021, from the respective date of payment of stamp duty for registering their apartment.
“Before this leeway was permitted, for over 95 percent of registrations in the recent years, the difference between the date of payment of stamp duty and date of registration was less than 10 days and for less than 2 percent of the registrations, the difference was over 30 days, the report said.
According to Rajani Sinha, Chief Economist & National Director Research, Knight Frank India, the demand in recent years has come from end-users and not investors and this trend continues even now.
"After the closure of the stamp duty window in March 2021, the relatively affordable segments (<1 cr) have dominated the major share of sales. The majority of homebuyers in the mid to high-income segments had purchased their apartment before the closure of the lower stamp duty window ending March 2021,” Sinha added.
Meanwhile, amid this surge in registrations, luxury homes with very high price points are being bought over the past couple of months in Mumbai and the Mumbai Metropolitan Region (MMR). Businessmen and those from the entertainment industry have been in the headlines as they parked their funds in luxury property purchases.
“With investor sentiment across different asset classes showing sharp swings post the pandemic, property has been leading the ‘favoured list’ among investments. HNI and property investors have driven the enhanced quantum of investments in property through July 2021,” said Niranjan Hiranandani is National President, NAREDCO.
When one looks at investment flows, the industry veteran believes there has been a shift in capital allocation towards the real estate sector.
“We have seen the pandemic bring about a paradigm change in terms of both, wealth creation as also growth. Real estate, especially residential, has done well through the pandemic as an investment option; and this, in turn, is leading to a shift in capital allocation towards real estate,” Hiranandani said.
Meanwhile, the homebuyers’ preferences seem to have changed amid the pandemic. The second Covid wave and the resultant lockdown has increased the home seekers’ desire for a home that provides safety and security through any major calamity, including the Covid-19 pandemic.
“The jump in property registrations in July 2021 has happened on demand from end-users; driven by the ‘hybrid’ model of work as also ‘work from home’ in the ‘new normal’. Homes that fit the requirements caused by the pandemic have registered high sales. Integrated townships which offer the entire gamut of amenities and facilities required as a result of the lockdowns have seen customer preference grow post the second wave,” Hiranandani said.
The gradual unlocking of the city, opening up of the economy, increase in vaccinations and sops from the state government and developers helped boost sales during the last month.
However, developers are of the view that it would be a real challenge to sustain the growth momentum going ahead and the government support to the industry will be crucial.
“There is still demand among the homebuyers, and we believe the numbers will see a gradual uptick if the State Government takes necessary measures to sustain the demand by reconsidering to trim the stamp duty till March 2022,” said Ashok Mohanani, President, NAREDCO Maharashtra.
First Published: IST