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Mumbai, India's most prominent and costly real estate market, has achieved a new milestone by recording its highest-ever stamp duty collection for April, despite a decline in overall property registrations. High-value transactions and premium and mid-income housing segments contributed significantly to this exceptional performance, highlighting the resilience of the city's property market amid increasing interest rates and housing prices.
These rising costs have strained homebuyers' affordability, leading to an impact on overall registration numbers. However, the state exchequer saw a 15% increase in revenue from stamp duty collections compared to last year, amounting to over Rs 845 crore. This rise occurred even though there was a 15% drop in registrations, which totalled 9,933 deals.
The decline in registrations was primarily due to two factors: the base effect and the seasonality impact. The base effect was a result of April 2022 having a higher number of registrations due to spill over from March 2022. Seasonality played a role as well, with April typically experiencing a dip in registrations after a strong March performance ahead of the new financial year.
Despite consecutive interest rate hikes and a steady increase in market prices, Mumbai's homebuyers have maintained a strong appetite for purchasing properties. Over the last decade, Mumbai has registered approximately 800,000 property sales, with 40% of these occurring since the introduction of the stamp duty stimulant in September 2020.
Even with stamp duty rates at a historical high of 6%, the market's momentum has continued. Between April 2022 and April 2023, Mumbai recorded 128,427 property registrations, accounting for 16% of all registrations in the past decade. The daily average property registration in April 2023 was 352 units, making it the second-best April in the last ten years.
In terms of location, South Mumbai witnessed a boost in sales, with a 10% increase in registrations in April compared to 7% in March and 6% a year ago. Homebuyers in April favoured properties priced up to Rs 1 crore, with 49% of registrations falling within this range. There was also a shift in buying patterns, with properties priced at Rs 2.5 crore and below accounting for 87% of registered properties, compared to 84% a year ago.
Regarding property size, apartments measuring 500 sq ft to 1,000 sq ft continued to be the top choice for homebuyers, 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.
In conclusion, Mumbai's property market has demonstrated its resilience and vibrancy, with the highest-ever stamp duty collection in April despite lower registrations. The market's growth is driven by high-value transactions and premium and mid-income housing segments. Despite rising interest rates and housing prices, homebuyers' appetite remains strong, reflecting the sustained momentum in Mumbai's real estate sector.
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