Housing sales jump 67% YoY in Mumbai in November 2020: Knight Frank India

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Updated: Dec 09, 2020 4:00 PM

Mumbai has recorded home sales volume at 9,301 units in November 2020, registering a whopping 67% year-on-year (YoY) rise over the same month last year.

At 9,301 units registered in November 2020, the residential sector of Mumbai recorded the highest-ever registrations in the month of November over the last 9 years.

Boosted by stamp duty cut and the festive period of Diwali, Mumbai has recorded home sales volume at 9,301 units in November 2020, registering a whopping 67% year-on-year (YoY) rise over the same month last year. This strong growth of 17% month-on-month (MoM) in November 2020 comes after a robust 42% MoM growth during October 2020 and a massive 112% MoM growth during September 2020, when sales of residential property started to show an upward trend after months of COVID-19-induced slowdown, according to Knight Frank India.

At 9,301 units registered in November 2020, the residential sector of Mumbai recorded the highest-ever registrations in the month of November over the last 9 years.

As per the report, the stamp duty cut of 300 bps (basis points) continues to propel residential sales in Mumbai. Most developers have offered to absorb the remaining 200 bps, which is resulting in huge savings for the homebuyer. In addition to the stamp duty cut, sales in November 2020 were also augmented by the auspicious period of Diwali and reduction of home loan rate to historic lows.

Other measures by developers such as deferred payment plans, indirect discounts and offers to negotiate on the final price of the apartment have helped entice homebuyers. Due to the lockdown many families have realised the need to have additional rooms in their apartment which created an entirely new demand for upgrade, which added to overall sales. Fence-sitters who have been actively scouting for properties over the past few years are also finding this the right time to purchase their dream homes.

Mumbai has, in fact, witnessed a cumulative residential sale of 22,827 units after the stamp duty cut during September-November 2020. The monthly run rate in this period after the stamp duty cut is approximately 135% or 1.35 times the monthly average of 2019.

Source: Department of registrations and stamps, Government of Maharashtra, Knight Frank Research

It is important to note that even after the stamp duty cut in Sep 2020, the State Government’s revenue collections from stamp duty have increased to Rs 2,328 million in Oct 2020 and 2,879 million in November 2020 and compared to Rs 1,764 million in Aug 2020. This shows that the boost to housing sales has more than compensated for lower duty and hence benefitted the State Government in terms of revenue collections.

Commenting on the same, Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “Limited period stamp duty cut continues to remain the biggest catalyst for residential sales in Mumbai. The sales were also augmented by the festive period, lowest ever home loan rates and incentives extended by developers. The proactive step by the Maharashtra Government has instilled confidence in the housing sector which had been faring low for the past few years. Improvement in the real estate sector will help recuperate economic growth and aid faster recovery from the crisis.”

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