Home run: Stamp duty cut brings 67% YoY jump in sales
STRAP: City recorded most registrations in almost a decade
Mumbai: Knight Frank India in its report released on Wednesday estimates that 9,301 homes were sold in November 2020, registering a whopping 67 per cent year-on-year (YoY) rise over the same time last year, boosted by the stamp duty cut and festive season. This strong 17 per cent month-on-month (MoM) growth came on the heels of a robust 42 per cent and a massive 112 per cent MoM growths in October and September 2020 respectively, when the sales of residential property began trending upwards trend after months of a pandemic-induced slowdown.
Mumbai has 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, was approximately 135 per cent or 1.35 times the monthly average of 2019.
According to Knight Frank India, a 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 Diwali and the 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 also helped entice homebuyers. Due to the lockdown, many families have realised the need for additional rooms in their apartment, which created an entirely new demand for upgrade, adding to the 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.
“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 INR 2,328 million in Oct 2020 and 2,879 million in November 2020 and compared to INR 1,764 million in Aug 2020. This shows that the boost to housing sales has more than compensated for lower duty and hence benefited the State Government in terms of revenue collections,’’ says the report.
Knight Frank India CMD Shishir Baijal said that the 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 by developers. The proactive step by the Maharashtra Government had instilled confidence in the housing sector, which had been lagging for the past few years, Baijal felt. Improvement in the real estate sector would help recuperate economic growth and aid faster recovery from the crisis, he added.
“The demand momentum in this market is likely to continue till the end of the year, buoyed by the low stamp duty regime. As income streams are coming back to normal, we believe that more buyers will come to the market before the end of the financial year, to make most of this opportune time to buy their dream homes,” he opined.
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