India’s biggest property market Mumbai saw a record 1.1 lakh property registrations in 2021, surpassing the previous record set in 2018. This was the first time that annual registrations crossed the 1-lakh mark in India’s financial capital.
The milestone came even as the benefit of lower stamp duty was rolled back in April.
Data from Anarock Property Consultants showed a clear picture of the sector’s recovery. Housing sales across the top seven cities rose 71% in 2021 to 236,530 units, indicating a strong consumer sentiment.
The demand however still fell short of pre-Covid levels by 10%.
Anarock has attributed the rise in housing sales to very low interest rates on home loans, pent-up demand, surge in aspiration for home ownership, cut in stamp duty by a few states including Maharashtra and discounts offered by builders.
Led by the festive demand, the October to December quarter contributed nearly 39% to overall sales during the last year.
But now, with the rise in Omicron cases, several states have imposed restrictions. Can this break the strong sales momentum that is continuing from last year?
Property prices may go up 5-10% in the short-term as developers may not be able to absorb further escalation in the prices of raw materials like steel and cement.
Rating agency CRISIL expects residential real estate to see a moderation in growth rate to 5-10% in FY23 in the top-six cities (listed below) due to a high base and as interest rates start inching up.
CRISIL expects the sales to rise 30-35% this fiscal, surpassing pre-Covid levels amid a strong consumer pull from favourable affordability and moderated capital values.
A wave of new launches, led by Mumbai, Pune and Hyderabad, are lined up for this year. Many organised and smaller players have formed joint ventures and joint development agreements to take advantage of the new wave. Therefore, any disruption due to Omicron is likely to be a blip in the ongoing demand recovery.
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