Mumbai real-estate's state: After 2022’s peak, property market maybe muted this year, know why

While the state collected Rs 8,900 crore in revenue from Mumbai sales, the December number indicates a downward trend.

Ateeq ShaikhUpdated: Sunday, January 01, 2023, 12:50 AM IST
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Mumbai real-estate's state: After 2022’s peak, property market maybe muted this year | Photo Credit: Pexels

Mumbai: Though 2022 ended on a high for Mumbai’s real-estate industry with record highs in property registrations and revenue collection, the momentum maynot be sustained in 2023, given the global headwinds.

Data from the Inspector General of Registrations show that 1,22,033 properties were registered in Mumbai in 2022, drawing Rs8,900.52 crore into Maharashtra’s coffers.

Figures till now

Property registration and revenue collection surpassed pre-pandemic numbers for the second year running. In calendar year 2019, 67,863 properties were registered in the city, just about half the 2022 number.

While the annual figures suggest the market is booming, a closer look suggests the impact of global headwinds has begun to be felt (see table).

In December 2020, when the pandemic lockdown restrictions were lifted in Maharashtra, there was a surge in property registrations in Mumbai with 19,581 agreements translating into Rs680.49 crore of revenue. Such a high number was also on account of the Government rolling out a partial stamp duty waiver, dropping the rate to 2% between September and December 2020 and 3% between January and March 2021.

In December 2021, 9,680 properties were registered in Mumbai, earning the state Rs758.70 crore as revenue. In December 2022, 313 fewer properties were registered, though the state earned Rs76.66 crore more on account of the stamp duty rate having gone up to 6% from the earlier 5% and an additional 1% levy towards metro cess.

MD of Liases Foras: We are seeing a slowdown in sales

Pankaj Kapoor, founder and Managing Director of Liases Foras, a real-estate research and rating firm, believes we are seeing a slowdown in sales that is likely to continue in the new year. While developers have continued to launch projects, demand has not picked up as much as was anticipated, Mr Kapoor pointed out.

Additionally, rising interest rates have pushed up equated monthly instalments (EMIs) on home loans, making them costlier by almost 9%.

Another industry consultant and observer sees the sector facing headwinds from possible global recession, high inflation, increasing interest rates and resurgence of Covid-19.

Developers, however, do not see much cause for concern. They are cheering 2022’s record performance and remain upbeat for 2023, albeit with government support.

“Various supply and demand patterns assessed over the last decade have started putting upward pressure on residential property prices,” said Pritam Chivukula, co-founder and Director, Tridhaatu Realty and Treasurer of developer association CREDAI MCHI. “Therefore, we will continue to urge the Government to provide further relaxations and beneficial incentives that will help the sector in 2023.”

Mr Chivukula added that the sales momentum is expected to continue in 2023 with buyers’ growing preference for bigger homes, better amenities and attractive pricing.

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