The fall in momentum has been exacerbated by the second wave of COVID-19 and the ensuing lockdown.
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 upwards of 10,000 residential property registrations in April 2021.
However, upon delving deeper into the property registrations data, it was noted that – only 7% of these registrations were from new residential sales concluded in the same month, while 93% of the registrations were from properties transacted between December 2020 to March 2021 for which applicable stamp duties were paid during the lower rate window.
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 31st March 2021, have maximum window of 4 months till 31st July 2021 from the respective date of payment of stamp duty for registering their apartment.
Table 1: Property Registrations (2020-2021)
| Month | Units Registered | % Change
(YoY) |
| Jan-2020 | 6,150 | 34% |
| Feb-2020 | 5,927 | 11% |
| Mar-2020 | 3,798 | -43% |
| Apr-2020 | – | -100% |
| May-2020 | 207 | -97% |
| Jun-2020 | 1,839 | -67% |
| Jul-2020 | 2,662 | -54% |
| Aug-2020 | 2,642 | -55% |
| Sep-2020 | 5,597 | 39% |
| Oct-2020 | 7,929 | 36% |
| Nov-2020 | 9,301 | 67% |
| Dec-2020 | 19,581 | 204% |
| Jan-2021 | 10,412 | 69% |
| Feb-2021 | 10,712 | 72% |
| Mar-2021 | 17,449 | 367% |
| Apr-2021 | 10,136 | NA |
Source: Maharashtra Govt- Dept. of Registrations and Stamps (IGR); Knight Frank India Research
Note- NA- Not applicable as sales in April 2020 were 0
There had been a very sharp pick up in property registrations in Mumbai between September 2020-March 2021 during the 7 months of concessional stamp duty window, hence, when the state government reverted to the previous stamp duty regime, sales momentum was expected to moderate post 31st March 2021. But the fall in momentum has been exacerbated by the second wave of COVID-19 and the ensuing lockdown.
Table 2: Corresponding deal closure period for registrations during April 2021
| Month | Share of registrations |
| December 2020 | 36% |
| January 2021 | <1% |
| February 2021 | <1% |
| March 2021 | 57% |
| April 2021 | 7% |
Source: Knight Frank India Research
Women homebuyers contribute 6.6% in new sales in April 2021
On 8th March 2021, to celebrate International Women’s Day, the Maharashtra Government announced a 1% rebate in stamp duty for women homebuyer effective from 1st April 2021. As a result of which women home buyers constituted 6.6% of new home sales in the month of April 2021 paying a discounted stamp duty rate of 4% over their purchase.
Table 3: Ticket size wise break up of units registered in April 2021
| Ticket size | Share of apartments sold |
| INR 1 Cr and below | 53% |
| INR 1 Cr to INR 5 Cr | 42% |
| INR 5 Cr to INR 10 Cr | 4% |
| INR 10 Cr – INR 20 Cr | 1% |
| >INR 20 Cr | 0% |
Source: Knight Frank India Research
Table 4: Government collection from property registrations
| April 2019 | April 2020 | April 2021 | |
| Registrations (units) | 5,940 | 0 | 10,136 |
| Revenues (INR crore) | 460 | 0 | 514 |
Source: Maharashtra Govt- Dept. of Registrations and Stamps (IGR); Knight Frank India Research
The State Government’s collections from stamp duty (ref: Table 4) registered a modest 12% increase in April 2021 against that in April 2019, despite a rise of 71% in units registered in the same comparable period. This was because 93% of registrations in April 2021, were for apartments that were transacted in the preceding 4 months paying stamp duty rates of 2% and 3% only but registered now. The State Government revenues from property registrations during the 7 months of lower stamp duty window (September 2020 till March 2021) were 66% higher than those collected during the preceding 8 months of 2020 (January 2020 till August 2020), indicating that reduction in stamp duty rates had been compensated by a sharp rise in sales velocity, thereby leading to higher revenue generation for the Government.
Shishir Baijal, Chairman & Managing Director, Knight Frank India, “The residential real estate sector had shown a healthy bounce back in the last few months backed by reduced stamp duty, contributing greatly to the state’s exchequers. The demand stimulus provided by the state helped the sector inch back providing employment and economic stability. This thereby proved that the stamp duty sop was a master stroke that kept the sector and indeed the state economy buoyant during the country’s prolonged fight against the pandemic.
In April 2021, as the government withdrew the reduction in stamp duty, coinciding with the second wave of the pandemic resulting in a virtual lockdown, demand and sales of new homes was severely impacted. Therefore, we sincerely feel that the State Government, at an opportune time, should reconsider measures to reinvigorate demand such as reduction in stamp duty to bring back the momentum and help the sector tide over the crisis.”
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