Decade High Property Registrations in Mumbai

The Mumbai real estate sector has seen robust sales momentum in the month of July, clocking a YoY rise of 15 percent , with government revenue collections  registering  an increase of 46 percent YoY – a decade high.  

In its latest assessment of the Mumbai market, leading property consultancy Knight Frank has noted  that Mumbai city (BMC area) saw property sale  registrations of 11,339 units in July 2022, contributing  over rupees  829 crore to the state revenue.. The number of units registered was the best in a decade for the month of July.   As many as 57% registrations were in the price band of rupees  One crore and above while in terms of apartment size, homes ranging between 500-1000 sq ft were the most preferred category of property registered. 

Strong property registrations momentum continued in July 2022, recording over 11000 properties with a 14% month on month  rise in view of the robust consumer demand. The property registrations have crossed the 11000 mark for the first time since April 2022. The April month marked the implementation of metro cess that effectively increased the stamp duty by 1%. However ,most consumers opted for property filing in March 2022 and registered the same in April 2022 to evade the additional 1% metro cess (metro cess implemented in April) leading to strong property registration in the month of April 2022 as well. However, July 2022 has recorded strong sales despite maximum properties being registered and filed in July month itself, paying  additional stamp duty. Moreover, despite the home buyers affordability getting stretched due to cumulative repo rate hike of 90 bps, property registrations remained buoyant.  

Property registrations in July 2022 were 15% above the same period last year despite July 2021 being a strong period as the lockdown had just been lifted and there was a benefit of  significant spill-over demand. As the restrictions gradually eased since June 2021, developers facilitated customer site visits and closed transactions that couldn’t conclude due to the lockdown in the previous month, leading to a rush in registrations in July 2021. However, with the support of strong consumer sentiment July 2022 has performed strongly making it the best performing July month in terms of property registrations in the last 10 years. 

 Strong consumer demand continues to drive the property sales in Mumbai. Post Covid, the revival in housing demand has sustained and facilitated a soft landing for the Mumbai real estate market though there has been an increase in home loan rates and additional levy of  1% stamp duty. The state government revenue has also grown robustly month on month. We expect the market demand to remain steady. However, further rate hike can put pressure on the property demand. Developers remain cognizant of the changing affordability and are expected to plan for risk mitigation such as enabling fixed rate limited period loans, and other measures, according to    Shishir Baijal, Chairman & Managing Director Knight Frank India                   

 Mumbai city July property sale registrations for the last decade 

Seventy eight percent of  all property sales registrations in July were for properties transacted in the same month. Even while 15% of properties registered in July 2022 were filed in March 2022 and around 7% of these deals were filed in June 2022, the home buying activity seemed unabated by the rise in stamp duty and home loan rates. 

Out of all the properties registered in July 2022, 86% were residential deals as compared to 87% in the previous month, while the contribution of commercial property deals went up from 8% last month to 10%. Industrial property deals contributed to 1% while land deals registered stayed under 1%. Other forms of property deals contributed to 3% of the total deals registered in July 2022. 

 Typology of property deals in July 2022 

The share of homes ranging from 500-1000 sq ft accounts for half  of residential properties registered in July 2022. The share rose from 45% in June 2022 to 50% in July 2022. Compact homes continue to be the second preference with a share take up of 34% . Homes ranging from 1000-2000 sq ft saw a share take up of 14% while the share of  homes measuring over 2,000 sqft remained unchanged  at 2%. 

Area wise breakup of apartment sales 

Residential properties ranging from INR 1 Cr to INR 2.5 Cr saw a rise in share from 37% in June 2022 to 42% in July 2022. The spotlight  continues to be on properties costing less than INR 1 Cr with a share of 43% in July 2022. The share of properties above 2.5 Cr ticket size remains unchanged since June 2022 at 4% in July 2022, while properties costing INR 2.5 Cr to INR 5 Cr have a share  of 10% .  Residential properties above 5 Cr record under 5% share of the total residential deals in July 2022. 

 Ticket size wise split of property sale registrations 

The share of western suburbs has risen from 45% in June 2022 to 56% in July 2022 while central suburbs has recorded a drop in share of contribution as compared to June 2022 and has gone from 41% in June 2022 to 28% in June 2022. Central Mumbai saw a contribution of 8% while South Mumbai recorded a rise of 2 percentage points to 8%.The maximum share of property registrations having ticket sizes of INR 5 Cr and below has been recorded in the western suburb and central suburbs micro market. For high value ticket sizes of INR 5 Cr to INR 20 Cr, central Mumbai recorded largest share contribution. The western suburb has emerged as a market catering to the housing needs of all income groups. 

 Micro-Market and ticket size wise breakup of apartment sales 

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

Consumers continue to demonstrate lower inclination towards relocation to a different micro market. Out of city buyers have shown interest in purchasing residential properties primarily in Western Suburbs followed by Central Suburbs for the month of July. 

As Central and Western Suburbs are relatively affordable markets, buyers in these micro markets have shown a strong tendency to upgrade to properties within their own micro market. 93% of homebuyers from Central Suburbs and Western Suburbs each prefer their current micro market while purchasing property. About 5% of home buyers from western suburb have relocated to central Suburbs. 

Homebuyers from the prime micro markets like Central and South Mumbai have comparatively lower inclination towards property purchase within the micro market. As many as  48% of home buyers from Central Mumbai and 60% of home buyers from South Mumbai have purchased a home in the same micro market. Central suburb has emerged as the second preferred market for homebuyers of central and south Mumbai having a share  of 33% and 15%. Inclination for homebuyers in central and south Mumbai to relocate to western suburbs remains low with under 12% customers purchasing property in the micro market.  

 Preferred location of property purchase 

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

The largest share of home buyers is  in the 31- 45 years  age category having contribution of 45% of the total residential property registrations. The home buyers in 46-60 years age bracket , have a share of 33%, while 10% home buyers are under 30 and 12% are over 60 years of age.