The new conclusion of property sales has taken a hit as only 29% of property registrations in the country’s commercial capital Mumbai in May.
Of the total new sales during the month, around 62% were in for apartments priced below Rs 1 crore, revealed the study.
In December, the state government had given a leeway of four months to homebuyers to register a property after the payment of stamp duty in order to prevent crowding of registration offices.
This ensured that homebuyers who had purchased residences and paid stamp duty on or before March 31, have a maximum window of 4 months till July end from the respective date of payment of stamp duty for registering their apartment.
Before this leeway was permitted, for over 95% of registrations in recent years, the difference between the date of payment of stamp duty and date of registration was less than 10 days and for less than 2% of the registrations, the difference was over 30 days.
“While the total registration in April 2021 was 10, 136, the new residences sold for that month had remained at a low 710 units. In May 2021, the number of new residential unit sales more than doubled to 1,553 showing a remarkable improvement despite the on-going lockdown. However, we are still far from pre-COVID levels of May 2019 or the levels witnessed during the seven months of lower stamp duty window,” said Shishir Baijal, CMD, Knight Frank India.
According to him, while the overall sales volumes are marred due to the lockdown conditions in Mumbai, the heartening fact is that sales in April 2021 and May 2021 have been substantially higher in the sub-Rs 1 crore category, which is traditionally understood to be price and value sensitive.
“Despite withdrawal of stamp duty rebate, sales in this category have maintained pace, indicating a healthy latent demand trend. Therefore, to ensure that this demand, and indeed demands in other categories, are further encouraged, the government should reconsider providing demand stimulants at the appropriate time,” he said.
Despite a month-on-month 47% decline in registrations in May, the new units sold during the month have grown 119% from 710 units in April 2021 to 1,554 units in May 2021.
This implies that in spite of the current lockdown restrictions, the market has started picking up. However, the numbers are nowhere close to the 6,270 units registered during pre-Covid May 2019. A strong demand stimulant is therefore required to further propel sales to regain pre-Covid levels.