Mumbai property market records best-ever February with over Rs 1,100 crore stamp duty collection

Mumbai, the country’s largest and most expensive property market, has continued to set new records in February despite higher interest rates and rising housing prices that has stretched house purchase affordability.

The performance in terms of stamp duty collection led by the premium and mid-income housing segments have catapulted the month to the spot of best-ever February.

Property registrations in the country’s commercial capital recorded a 6% rise over January with 9,537 deals, while the exchequer’s revenue from stamp duty collections soared 60% at Rs 1,103 crore, showed data from the inspector general of registration, Maharashtra.

While registrations saw an 8% decline from a year ago, stamp duty collections rose nearly 80% from a year ago and 153% from pre-pandemic February 2020.

Higher sales of luxury apartments following the announcement in Union Budget 2023-24 to limit the deduction from capital gains on investment in residential property to Rs 10 crore helped in higher revenue collection.

“Ready to move in homes with Occupation Certificates (OCs) are seeing more demand, both at the enquiry and sales conversion levels. This is especially amongst luxury and premium home buyers, looking to save tax following the announcement in the Union Budget with reference to long term capital gains on investment in residential properties,” said Ramesh Ranganathan, CEO, K Raheja Corp Homes.

According to him, walk-ins at the developer’s luxury projects have risen 50-60% over the month, largely led by the capital gain saving seekers.

The number of luxury property deals have increased as this limit will be implemented from April 1.

“The state exchequer made significant revenues from property registration due to a rise in average value of properties registered in February 2023. This month, the average value of properties registered was recorded at Rs 1.9 crore which is 65% higher than a year ago at Rs 1.18 crore. Besides, the rise in value, contribution from the Metro Cess has also added to the revenues,” said Shishir Baijal, CMD, Knight Frank India

According to him, the performance has led to a decadal high revenue collection for the month of February at an average of Rs 39 crore per day. This is an indicator of the buoyancy in the mid and high-end segment, which continues to show strength despite headwinds.

While the luxury and premium category have performed well, rising interest rates have started to impact the momentum in the affordable housing segment. The Reserve Bank of India raised the repo rate by a cumulative 250 basis points through six successive hikes in policy rates since May, pushing it to 6.5%, making loans expensive and weakening the affordability.

During the month, apartments sized between 500-1,000 sq ft continued to be preferred by homebuyers, accounting for 45% of registrations. Apartments with less than 500 sq ft saw a marginal decline in market share to 34% from 35% in January. The share of apartments larger than 1,000 sq. ft increased to 21% from 17% in January.

Homebuyers’ spending pattern on housing remained similar in February with apartments priced at Rs 2.5 crore and below accounting for 87% of the properties registered, while Rs 2.5 crore and above accounted for 13% of the total properties registered during the month.

Source: economictimes.indiatimes.com

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