The Mumbai property market witnessed 8,149 sale registrations in August — the month's best tally in nearly a decade. These registrations in all, contributed over Rs 620 crore to the state exchequer, a year-on-year rise of 47 percent. In terms of the number of registrations, the tally is 20 percent higher than last August year, which recorded 6,784 registrations.
A study by Knight Frank revealed that nearly 60 percent of registrations this month were in the price band of over Rs 1 crore, while the most preferred properties were homes between 500 and 1,000 square feet. The uptick is especially significant since August has traditionally been a sub-par month in terms of registrations.
"August has historically recorded a month-on-month decline in eight out of the last ten years. Even this year, the rise in the repo rate to the tune of 140 basis points, which led to a rise in home loan rates and increase in stamp duty has had its impact on buyer sentiments," said Shishir Baijal, chairman and managing director, Knight Frank India.
The insights are accurate with registration trends in August over the last decade. Barring 2018 and 2019, August has seen a month-on-month decline in property registrations. Even this year, despite the year-on-year spike, the number of registrations fell 28 percent, when compared to July.
"Despite this, Mumbai's home sales momentum has remained comparatively buoyant and recorded a growth over the same period last year," Baijal added. He emphasised that it might still be premature to assess whether the hike in lending rates will impact home sales in the long term.
Developers say a sustained infrastructure push is the reason for buoyant sales trends despite policy-level impediments like rate hikes. "Western Mumbai has seen rewarding growth considering the implementation of metro access, and the luxury segment here has shown stable demand since April, especially in the Khar-Bandra-Santacruz belt," said Ram Raheja, director, S Raheja Realty.
Raheja also pointed out that buyers have preferred the Western Suburbs as a location owing to better projects in the area, including a product offering spanning condos and luxury real estate in general. "Developers have managed to strike up record deals and have left an imprint on the region’s real estate sector," he added.
"The Indian job market seems unfazed by inflation as hiring across IT, ITES, and the healthcare sector has increased," said Dhaval Ajmera, director, Ajmera Realty and Infra India Ltd, "While there might be fluctuations in home-buying, we are confident that real estate market will be the most important investment asset class for the future."
Residential sales across India have run into rough weather between May and August owing to inflationary pressures and three successive repo-rate hikes totaling 140 basis points. The anticipation of an imminent rate-hike in August caused home-buying to peak in July (11,340 registrations), which saw August register a month-on-month drop.
Also Read: What key rate cuts in China mean for India
According to Knight Frank, buyers are expected to exercise caution while buying homes as they anticipate more rate hikes, which would lead to more expensive loans.
First Published: Aug 30, 2022 6:11 PM IST
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