Mumbai's real estate sector came under the heavy cloud as monthly registrations declined by 47% in May. Overall, the value of registrations also declined 48% YoY to Rs 5,400 crore. This was due to the strict restrictions imposed by the local government.
Out of the total 5,360 units registered, 1,553 units pertained to new sales. For the remaining units, sales were concluded during December 2020-April 2021. In December 2020, the state government had given a leeway of four months to homebuyers to register a property after the stamp duty payment to prevent crowding of registration offices.
Effect of Reinstating Stamp Duty
This is the second month in line where real estate sales have declined in Mumbai after the withdrawal of stamp duty relaxations from the Maharashtra government. In April, post-withdrawal of stamp duty waiver, ~10,136 properties were registered in Mumbai. It was a 43% decline from 17,728 units registered in March 2021.
Around 62% of the units registered during May had less than Rs 1 crore ticket size. It is a sign that the affordable housing segment witnessed higher traction. Before that, the stamp duty relief had boosted sales of higher ticket size luxury units. The average ticket size of the housing units stood at Rs 1.02 crore in April 2021. It was Rs 1.65 crore in March and Rs 1.15 crore in February 2021. In December 2020, the number was Rs 1.74 crore.
Demand for Restoring the Stamp Duty Relaxations
Considering the impact of the second COVID-19 wave, the real estate industry has sought extension in stamp duty relaxations. The Maharashtra government had reduced stamp duty in September 2020, post the first lockdown to revive the sales of the properties.
The relaxations had the desired impact as the number of registration shot up across Maharashtra during that period. However, new registration numbers have once again declined as relaxations have ended in February.
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