Mumbai sees 29% dip in new home sales’ share in May
Premium- The Maharashtra government’s collections from stamp duty witnessed a 50% decline in May 2021 compared to May 2019 despite overall registrations dropping only 15%
BENGALURU: The country’s most valuable real estate market, Mumbai, saw a slowdown in home sales in May, with only 29% of property registrations from new residential sales concluded during the month. About 71% of registered properties were from sales concluded between December 2020 and April 2021, as per a study by property advisory Knight Frank India.
Total property registrations in Mumbai stood at 5,360 deals in May, down 47% from April and 15% lower from 2019.
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However, registrations last month were higher year-on-year when the India was under a stringent nationwide lockdown.
Of the total new sales in May 2021, 62% were in the sub-Rs1 crore category.
The Maharashtra government in December 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 March 2021, had a maximum window of four months till 31 July 2021 from the date of payment of stamp duty for registering their apartment.
Before this, for over 95% of registrations in 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.
“…We are still far from pre-covid levels of May 2019, or the levels witnessed during the seven months of lower stamp duty window. While the overall sales volumes are marred due to the lockdown conditions in Mumbai, the heartening fact is that sales in April 2021 and May 2021 have been substantially higher in the sub – ₹one crore category, which is traditionally understood to be price and value sensitive," said Shishir Baijal, chairman and managing director, Knight Frank India.
Despite withdrawal of stamp duty rebate, sales in this category have maintained pace, indicating a healthy latent demand trend.
“To ensure that demand is further encouraged, the government should reconsider providing demand stimulants at the appropriate time," Baijal added.
The Maharashtra government’s collections from stamp duty witnessed a 50% decline in May 2021 compared to May 2019 despite overall registrations dropping only 15%. This was because 70% of registrations last month were for apartments that were transacted in the four months of December 2020 to March 2021, paying stamp duty rates of 2% and 3% only but were registered now.
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