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Mumbai property market scales new peak, records best September performance ever

India’s commercial capital Mumbai has recorded its best September performance in terms of property registrations and stamp duty revenue collections, as robust demand boosted sales momentum despite higher mortgage rates and real estate prices.

The country’s largest and most expensive realty market saw registration of over 10,602 properties during the month, up 23% from a year ago, while revenue collection through stamp duty charges rose 53% on-year to contribute over Rs 1,124 crore to the state’s exchequer, showed data from Maharashtra’s inspector general of registration.

Real estate developers and industry experts are of the view that the momentum in property sales will continue in the upcoming festive season.

“The robust response from homebuyers during the month of Ganesh Utsav indicates the positive sentiments towards home ownership despite higher mortgage rates,” said Sandeep Runwal, president, NAREDCO Maharashtra and MD at Runwal Developers. “Based on the current enquiry levels, we can certainly see a strong sales momentum in the upcoming festive season starting with Navratri.”

Of the total properties registered in the month, 82% were residential apartments while commercial and other segments constituted the remaining 18%.

“The Mumbai residential market continues to display remarkable resilience, consistently surpassing the 10,000-property mark,” said Shishir Baijal, CMD, Knight Frank India. “In fact, for the first nine months of 2023, we have observed a monthly average of 10,433 property transactions. The growing prominence of properties valued at INR 1 crore and above indicates a shift in preference towards more spacious and upscale accommodations, mirroring the upward trajectory of property prices.”According to him, amidst a backdrop of strong economic growth in the country, there is a prevailing expectation among homebuyers for a stable interest rate environment. Such stability has the potential to further fortify the strength of the housing market, fostering an environment ripe with opportunities and optimism.In the first nine months of 2023, the city witnessed a registration count of around 94,300 units, resulting in a revenue accumulation of around Rs 8,400 crore for the state government treasury. This performance stands as the highest within the same time frame ever.

The elevated revenue growth can be attributed to factors like registration of higher-value properties and augmented stamp duty rate.

In the last few years, there has been a consistent upward trend in the percentage of property registrations for properties valued at Rs 1 crore or more. This proportion has risen to around 57% in January to September 2023 from 49% in January to September 2020.

The increase in property prices, combined with a significant 250 basis points rise in the interest rate during this period has, however, influenced property registrations below the Rs 1 crore threshold. Registrations for properties valued at Rs 1 crore and above have shown a relatively limited impact of these changes.

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