The city of Mumbai (area under the jurisdiction of BMC) saw the record of property sales of 9,867 units in April 2023, adding more than Rs 840 Crores (Cr) to the public treasury, recording its highest revenue collection for the month of April, over the past 10 years. Of the total number of registered properties, 83% were residential properties while 17% were non-residential properties. Revenue growth is driven by an increase in the stamp duty rate and an increase in higher-value real estate transactions, according to a new report.
According to a report by Knight Frank India, the average daily property registration in April 2023 was 352 units, making it the second best April in the last ten years after April 2022. The total number of registrations however has fell in April 2023. Total property registrations in April 2023 stood at 9,867, down 16% year-on-year.
The decline was largely driven by two reasons, firstly a base effect as April 22 saw an overflow of listings from previous months with 17% of properties registered in April 2022 being filled in March 2022. Secondly, a seasonality effect As in the last 8 out of 10 years, the month of April has seen a drop in registrations compared to March of this same year.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, said: “Mumbai’s appetite for buying a home has remained strong despite rising stamp duty, a consequential rise in interest rates and a constantly rising market prices. Over the past 10 years since April 2013, Mumbai has recorded sales estimated at 800,000 properties. 40% of this, or around 318,000 units, have been recorded since September 2020 from when the stamp duty incentive was introduced.”
Baijal added that despite the stamp duty rate being raised to an all-time high of 6%, the momentum continues so far. Mumbai recorded the registration of 128,427 properties between April 2022 and April 2023, which is around 16% of all properties registered in the last 10 years.
“The Treasury benefited from market momentum which now marks its best month of April in terms of revenue collection. and let the year-end in March play its part in lowering MoM figures, the month was marked by great cheer in the form of a pause in key interest rate hikes. respite to homebuyers, keeping their affordability intact, crucial to fulfilling their desire to own a home,” Baijal added.
In April 2023, apartments from 500 square feet (sq.ft.) to 1,000 sq.ft. continued to be buyers’ preference, accounting for 44% of all apartments. Apartments under 500 sq.ft. experienced a slight decline in market share from 36% in April 2022 to 32% in April 2023. Market share for areas over 1,000 square feet fell from 17% in April 2022 to 24% in April 2023.
Up to Rs 1 Cr remains the sweet spot for home buyers with 49% registrations in this price category, according to the report.
In April 2023, the buying habits of house buyers changed, with Rs 2.5 Cr and below representing 87% of registered properties compared to 84% in April 2022, and Rs 2.5 Cr and above representing 13% of all houses registered against 16% in April 2022.
Sales in South Mumbai see slight increase with 10% registrations in April 2023
The bulk of sales registrations were for properties in the western suburbs constituting 54% of the market share in April 2023, while 30% of registrations were for properties in central Mumbai. In April 2023, 6% of registrations were in Central Mumbai, while South Mumbai’s share of total property registrations stood at 10%.
Both Central and Western Suburbs markets have seen significant launch volumes in recent months in response to strong demand. These locations offer great value as most new developments here offer modern living amenities. In addition, these locations are already or will soon be connected via the metro network, which further strengthens the profiles of these properties.
The central suburbs and the western suburbs have the highest percentage of property registrations under Rs 5 Cr. However, most of the transactions exceeding Rs 5 Cr were recorded in Central and South Mumbai with one big transaction of over Rs 20 Cr recorded in Central Mumbai.
The majority of buyers prefer relocation within their micromarkets
Consumers continued to favor buying in their local micromarket in April 2023. The central and western suburbs demonstrated a significant propensity of buyers to buy homes in their own micromarket. 91% of western shoppers and 94% of central suburban shoppers chose to buy from their existing micro-market because location awareness is a key consideration for end users, along with the availability of suitable products at their price and their requirements.
About 8% of all homebuyers in the western suburbs moved to the central suburbs, while 5% of homebuyers in the central suburbs moved to the western suburbs.
Home buyers in the most desirable micro-markets, including central and south Mumbai, have a relatively lower propensity to buy in the same market. A house was purchased in the same micro-market by 53% of Central Mumbai home buyers and 55% of South Mumbai home buyers.
Residential properties in the western and central suburbs attracted the most interest from out-of-town buyers.
Homebuyers in the 31-45 age category remain the largest group of buyers
In April 2023, the 31-45 age group made up the largest percentage of home buyers, accounting for 44% of all residential property listings. 12% of home buyers are under 30, while 30% of buyers are between 46 and 60 years old.
In April 2023, the share of home buyers aged over 60 was 14%.
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