Growth in property sale registrations in Mumbai continues to remain robust with some moderation recorded in recent months. November 2022 recorded an 18% Year on Year (YoY) rise in property sale registrations and 24% YoY growth in government revenue collection.
Although both periods November 2021 and 2022 were devoid of any government incentives, November 2022 had an influence of increased mortgage rates and metro cess that increased the stamp duty burden by 1 percentage point. Nonetheless, despite these headwinds, November 2022 continues to record robust growth in sales.
This growth in property registrations can also be accounted for by the sustained momentum from the preceding festive period. The October month benefited greatly due to the positive market sentiments driven by the festive season. Even though the festive period ended in October, the market sentiments continued in November 2022 with property sale registrations recording a 6% Month on Month (MoM) rise.
The period from January-November 2022 has recorded a jump in property sales registrations and revenue collections. In 2022, the period recorded a 10% YoY rise in property sales registrations and a massive 51% YoY rise in government revenue collections, reflecting the positive market sentiment driving sales. For the January-November period, 2022 has emerged as the best performing year in the last 10 years since 2013.
However, some moderation in property sales registration momentum has been witnessed in the last 6 months. This happened in the backdrop of an increase in home loan interest rate, property prices and stamp duty which together impacted house purchase affordability.
Ticket size categorisation
In October 2022, properties of up to Rs 10 million (mn) and below recorded the largest share take up of 45% and were the demand drivers in that month. However, properties falling in the price bracket of Rs 10 to 25 mn have emerged as the preferred ticket size in November 2022 having a share contribution of 42%. Both these ticket size bands capture the maximum market, catering to 83% of the demand in November 2022.
Residential properties with ticket size of INR 25 to 50 mn recorded a rise from 10% in October 2022 to 11% in November 2022. The premium markets share, however, has remained unchanged in November 2022 with the share of properties above INR 50 mn remaining at 5% in November 2022 compared to last month.
Micro market categorisation
The western and central suburbs dominate the residential property demand accounting for 88% of the demand in November 2022. Western suburbs’ share in total registrations in November 2022 has fallen from 57% in October 2022 to 53% in November 2022. Central suburbs recorded a rise in share of contribution as compared to October 2022 and has gone up from 34% in October 2022 to 35% in November 2022.
Central Mumbai saw a MoM rise in property registrations from 5% in October 2022 to 6% in November 2022. The share of South Mumbai recorded a rise from 4% in October 2022 to 6% in November 2022.
The maximum share of property registrations below Rs. 10 mn are recorded in Central Mumbai and South Mumbai, while the major share of transactions having a ticket size of Rs. 10 to 50 mn have been recorded in the western and central suburbs. For high value ticket sizes of Rs. 50 mn and above, western suburbs and South Mumbai recorded the larger share contribution.
Buyer profile
In November 2022, consumers continue to prefer remaining in their home micro market. Buyers in the central and western suburbs have shown a strong tendency to upgrade to properties within their own micro market. 89% of homebuyers from central suburbs and 91% from western suburbs preferred their current micro market while purchasing property.
About 6% of all home buyers in western suburbs have relocated to central suburbs, while about 8% of homebuyers from central suburbs have relocated to western suburbs. Homebuyers from prime micro markets like Central and South Mumbai have a lower inclination towards property purchase within the micro market. 51% of home buyers from Central Mumbai and 45% of home buyers from South Mumbai have purchased a home in the same micro market. Out-of-city buyers have shown interest in purchasing residential properties primarily in western suburbs followed by central suburbs.
Age of home buyers
The largest share of home buyers in November 2022 continued to be in the age bracket 31-45 years having a contribution of 44% of the total residential property registrations. Buyers in the age group 46-60 years have a share of 34%, while 10% home buyers are under 30. Home buyers with over 60 years of age recorded a share take up of 12% in November 2022.
What's selling
The share of homes ranging from 500-1,000 sq ft accounts for almost half the residential properties registered in November 2022. The share fell from 47% in October 2022 to 46% in November 2022.
Compact homes continue to hold second preference position with a share take up of 36% in November 2022.
Homes ranging from 1,000-2,000 sq ft saw a rise in share take up from 14% in October 2022 to 16% in November 2022 while the share of over 2,000 sq ft homes fell from 3% to 2% in November 2022.
