Best-ever April for Mumbai property stamp duty collection despite lower registrations

Mumbai, the country’s largest and most expensive property market, has continued to set a new benchmark with the best stamp duty collection recorded ever in the month of April despite lower deal registrations.

The performance in terms of stamp duty collection was led by the high-value transactions, premium and mid-income housing segments that have catapulted the month to the spot of best-ever April.

Higher interest rates and housing prices, however, has stretched house purchase affordability and has impacted the overall registration numbers.
The state exchequer’s revenue from stamp duty collections has witnessed 15% rise from a year ago to over Rs 845 crore despite 15% lower registrations at 9,933 deals, showed data from the inspector general of registration, Maharashtra.

The decline in registration was largely led by two factors including the base effect as April 2022 observed a spill-over of registrations with 17% of properties registered in that month were filed in March 2022.

Secondly, the seasonality impact as indicated by the performance in the last 10 years. An 8 out of 10 times, April has witnessed a registrations dip as registrations cooled off after a strong March performance ahead of the new financial year with anticipation of a stamp duty and ready reckoner hike.

“The state exchequer has benefitted from the market vibrancy that now marks its best April month in revenue collections. While the YoY registration momentum in April 2023 is lower due to the base effect, and financial year closing in March playing its role in lower month-on-month numbers, the month saw a big cheer in the form of a pause in policy interest rate hikes,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India.According to him, Mumbai’s home buying appetite has remained strong despite a rise in stamp duty, consecutive rise in interest rates and a steady rise in prices in the market. In the last 10 years since April 2013, Mumbai has registered an estimated sales of 800,000 properties. Around 40% of this, which is an estimated 318,000 units, has been registered since September 2020 from the time the stamp duty stimulant was introduced.

Despite the stamp duty rate being elevated to a historic 6% high, the momentum continues thus far. Mumbai saw a registration of 128,427 properties between the period April 2022 and April 2023, constituting about 16% of all properties registered in the last 10 years.

The daily average property registration in April 2023 was 352 units, making it the second-best April month in the last ten years after April 2022. Sales in South Mumbai registered an uptick with 10% registrations in April as against 7% in March and 6% a year ago.

Price tag of up to Rs 1 crore remained the sweet spot for homebuyers with 49% registrations recorded in this price category.

During the month, homebuyers’ buying patterns on housing shifted, with Rs 2.5 crore and below accounting for 87% of registered properties compared to 84% a year ago, and Rs 2.5 crore and above accounting for 13% of all registered houses compared to 16%.

In April, apartments measuring 500 sq ft to 1,000 sq ft continued to be homebuyers’ preference, accounting for 44% of all registrations. Apartments with less than 500 sq ft saw a marginal decline in market share to 32% in April from 36% a year ago. The share take – up for areas larger than 1,000 sq ft increased to 24% during the month from 17% a year ago.