Mumbai sees record blockbuster home sale registrations in the final days of 2020: Knight Frank India

Sales in December 2020 recorded at an estimated 18,854 units

December records 103% increase in registration over November

by Suman Gupta

Mumbai, December 31, 2020: Knight Frank India, the leading real estate consultancy in the country, today noted that Mumbai recorded a historic surge in home sales registrations in the month of December 2020. Total sales registered till December 30, 2020 for the month of December is recorded at 18,854 units. The sales particularly peaked in the last days of the month with 3059units being registered between December 28 – 30¹, 2020. As the stamp duty is set to increase by 1% starting January 01, 2021, there was a stupendous increase in registrations in the last few days of the year. Till December 25, 2020 the daily average of number of units getting registered in the month of December 2020 was at 585 units. This daily average of registrations nearly doubled at 1019 units in the last week between December 27 – 30, 2020.

The total revenue realized by the state exchequer in 2020 from home registration was estimated INR 3107 Crores. Of the total revenue nearly 43% (INR 1350 Crores) was realized in the period between September 1 – December 30¹, 2020. This can be seen as a clear indication of the strong impact the cut in stamp duty rates had on the revenues. January 01 – August 30, 2020 was a total collection of INR 1756 Crores in the form of Stamp Duty from home sales registrations.

The reduction in stamp duty has created beelines for sales and registration of homes with Mumbai witnessing of the best sales periods in history. Since the announcement of the reduction of 300 basis points (BPS) starting September 01, 2020 homes sales have continuously risen month on month. Between the period September 01 – December 30, 2020, Mumbai recorded registration of 41,681units with numbers growing incrementally month on month.

HOME SALES REGISTRATIONS (2020)

Source: Maharashtra Govt- Dept. of Registrations and Stamps (IGR); Knight Frank India Research

The month of December 2020 (till Dec 30, 2020) is especially remarkable as it grew two times over the same period last year. While December 2019 noted registrations of 6,433 units, December 2020 saw 18,854 units being registered.

Since September 2020 home sales registrations have been witnessing significant month-on-month growth after recording degrowth in the initial months of the year. December saw over 100% increase (more than double) home sales registrations over November – with one day to spare for end of the month –demonstrating the rush of buyers who intend to take advantage of the lowest possible stamp duty rates. This rush is likely to spill over to the ensuing months when the preferential stamp duty rates will be applicable.

While 2019 saw total registration of 67,863 units, registrations in 2020 (till December 30, 2020) have come comfortably close to last year’s level. Total registration from January 01 – December 30, 2020 was recorded at 64,906 units, despite the fact that April 2020 saw no sales registrations and May 2020 recorded registration of just about 200 units.

Shishir Baijal, Chairman & Managing Director, Knight Frank India, “The reduction in stamp duty has led to a significant surge in sales of homes in Maharashtra, particularly in Mumbai, comforting the long -beleaguered real estate sector of this region. A combination of lowest home loan rates, reduced prices along with rebates and offers made by developers, as well as increased household saving rates, have provided the right growth environment for the residential segment to grow. This positive sales momentum is crucial for the developers, who were facing severe liquidity challenges as well as below par valuations for their projects, making it tough for them to raise capital.”

Shishir further added, “Home sales velocity such as this, is a strong indicator of imminent growth the market can expect should such measures be taken further. As one of the largest employers of manpower – second only to agriculture, sustained growth of the sector over mid to long-term will also be instrumental in the proposed bounce back of the economy.”