Mumbai recorded its best property registrations in 11 years in October, spurred by rising income levels and homeownership demand in the festive month.
India's financial capital is estimated to register 10,523 properties in October 2023, a 25% surge in registrations and a 15% growth in revenue compared to the preceding year, according to data assessed by Knight Frank India Pvt.
Of the overall registered properties, residential units constitute 80%, while the remaining 20% are non-residential assets, the report said.
The Maharashtra government is estimated to mop up a revenue of Rs 831 crore thanks to the sales.
Mumbai has achieved its highest October performance in a decade in terms of both registration and stamp duty collection, the report said.
Stamp duty collection has risen 25% year-on-year, resulting in a revenue collection of Rs 9,221 crore for the state government.
The city has recorded 1,04,832 property registrations since January this year. Further, it has reported property registrations north of the 10,000 mark for seven out of the last 10 months.
The property boom in Mumbai comes from factors like rising income levels and a positive attitude towards homeownership, Knight Frank said.
"In the context of steady economic growth in the country, homebuyers are increasingly anticipating a stable interest rate environment," said Shishir Baijal, chairman and managing director, Knight Frank India.
"Such stability holds the potential to strengthen the housing market even further, creating an environment filled with promising opportunities and optimism," he said.
Rise In Share Of High-Value Properties
There has been an upward trend in the share of registrations for properties valued at or over Rs 1 crore in recent years, the data showed. This segment of Mumbai's real estate market has risen from 50% in January-October 2020 to 56% in January-October 2023.
The increasing prominence of properties valued at Rs 1 crore and above indicates "a shifting preference towards more spacious and upscale accommodations", Baijal said.
"This shift also reflects the upward trajectory of property prices in the region and signifies the buyers' capability and willingness to make long-term commitments," he said.
The increase in property prices, combined with a significant 250 basis point rise in the policy repo rate during the last two years, had adversely impacted property registrations below the Rs 1 crore threshold, the report noted.
However, registrations for properties valued above have shown a relatively limited impact of these changes.
In its fight against inflation, the Reserve Bank of India went on a tightening cycle from April 2022 before hitting the pause in February this year. The policy repo rate, the key benchmark on which home credit is based, has been kept unchanged at 6.5%.
Suburbs Remain Attractive
Mumbai's central and western suburbs have experienced a surge in launches in response to strong demand due to the wide range of properties with modern amenities, Knight Frank said.
These locales are already well-connected or set to be linked through upcoming metro networks, further enhancing the attractiveness of these properties.
Mumbai is currently undergoing a massive infrastructure buildup, with the construction of a new web of metro rail links and a coastal road project aimed at reducing traffic congestion and connecting the southern commercial towns with its bustling northern suburbs.
Around 74% of western suburb buyers and 81% of central suburb purchasers opt to purchase within their micromarket, the report said.
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