Property registrations for July 2021 clock highest ever registrations for July month in the last decade: Knight Frank India

by Suman Gupta

• Monthly registrations in July cross 9,000 mark (30 July 2021 till 1200 hours)

• 53% of registrations in July 2021 were of new sales in that particular month, compared to 42% in June, 29% in May and 7% in April

• Incentives offered to promote home ownership amongst women need to be enhanced further

Mumbai, July 30, 2021: Knight Frank India, the leading real estate consultancy in the country, noted that Mumbai BMC region (i.e. Churchgate to Dahisar and Colaba to Mulund) recorded property registrations of 9,037 units in July 2021, registering a growth of 15% Month-on-Month (MoM) over June 2021 and up 239% YoY compared to 2,662 units registered in July 2020. The registrations for July 2021 were also 57% higher compared to the same month in pre-pandemic period of July 2019.

Even though the duration of lockdown in Mumbai was similar to last year, the pick-up post gradual easing of restrictions in June was sharper this time around compared to last year. Developers had used their marketing prowess and learnings from the first wave to keep the homebuyers engaged during the second lockdown. 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.

The Maharashtra State Government, in December 2020, 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 31^st March 2021, have maximum window of 4 months till 31^st 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.

Table 1: 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

Table 2: Corresponding deal closure period for registrations during April 2021 – July 2021

Source: Knight Frank India Research, Note- NA-not applicable

Delving deeper into the property registrations data, it was noted that 53% of registrations in July 2021 were from new residential sales concluded in the month, recording a sharp improvement compared to 42% in June 2021, 29% during May 2021 and 7% during April 2021. At 4,824 units (30 July 2021 till 1200 hours), the number of new apartments sold (fresh sales) during July 2021 were 45% higher compared to 3,300 units sold in June 2021, 207% higher compared to 1,554 units sold in May 2021 and 573% higher compared to 710 units sold during April 2021.

Table 3: Registrations in the month of July in the preceding decade

Source: Knight Frank India Research

While registrations in July 2021 are at a decadal high (for the month of July), it is important to note that 53% of registrations or 4,824 units2 were new sales which is around 84% of July 2019 average, implying that we are yet to cross sales of pre-Covid levels.

3% share of women homebuyers in new sales in July 2021, drops from 4.7% in June 2021:

On 8^th March 2021, to celebrate International Women’s Day, the Maharashtra Government announced a 1% rebate in stamp duty for women homebuyers effective from 1st April 2021. As a result of which 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 in May 2021 dropped to 1.7%. In June, the share of women homebuyers registered increased to 4.7%, however, it fell to 3% in July 2021. The concessions offered to women homebuyers must be enhanced further as the number of apartments registered in the name of women has not risen to a meaningful proportion.

Table 3: Ticket size wise break up of units registered

Source: Knight Frank India Research

Shishir Baijal, Chairman & Managing Director, Knight Frank India said, “It is encouraging to see a strong pick up in property registrations in the recent months, despite the impact of second wave. Property registrations have continued to grow on a monthly basis since May 2021 and have crossed the 9,000 units mark in July 2021. The registrations for July 2021, so far, have recorded highest ever numbers for the month of July in the last decade. 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 third wave. The fact that new registrations for the month of July has also shown an encourage increase over last few months also bears testimony to the fact that demand for new homes remains intact. Further, to promote the cause of home ownership amongst women, the state government had offered stamp duty concessions of 1% to women homebuyers. However, we are yet to see a meaningful pick-up in apartments registered in the name of women. We feel that the incentives under this initiative need to be enhanced further.”