The country’s commercial capital recorded more than 8,310 real estate transactions during the month, helping the state treasury rake in stamp duty revenues worth more than Rs 630 crore, data from Inspector General of Registration, Maharashtra, showed. on the last business day of the month.
The number of deal registrations is up 22% from a year ago and 41% even from the pre-pandemic period. Revenue collection is up more than 50% from the prior year due to a higher contribution from higher value segments and a one percentage point higher stamp duty rate.
“August has historically been a slower month, recording a monthly decline in eight of the last ten years. The 140 bps increase in the repo rate, which caused mortgage lending rates to rise, and the increase in the stamp duty has had its impact on buyer confidence. Despite that, the momentum of Mumbai home sales has remained comparatively buoyant,” said Shishir Baijal, CMD, Knight Frank India.
According to him, it may be too early to assess whether the impacts of these rate changes on home sales are long-term and whether homebuyer sentiments are expected to carry over into the upcoming holiday season.
“We have seen strong property buying in recent months as the magnitude of the price increase being passed on to consumers has been smaller compared to the increase in input costs. The Indian central bank is likely to raise interest rates further to bring inflation back under control. As a result of that, we have already started to see short-term repercussions on overall housing demand,” said Rajan Bandelkar, President of NAREDCO National.
With the festive season kicking off, he urged the government to offer concessions on stamp charges as offered at the time of the pandemic to further encourage homebuyers’ interest in purchasing property.
With inflationary pressures looming, the Reserve Bank of India (RBI) has made three consecutive repo rate hikes totaling 140 basis points in a short period from May to August. The anticipation of a rate hike in August had pushed July registration activity to a high of over 11,340.
Homebuyers are now expected to remain cautious as they finalize their deals in the context of the anticipation of additional rate increases that will effectively lead to a rise in mortgage rates that will affect their affordability.
Over 95% of all property sales records in August were for properties traded in the same month. Around 3% of the properties registered during the month were presented in July and around 2% of these transactions were presented in March and June.
The proportion of houses with sizes ranging from 500 square feet to 1,000 square feet represents more than half of registered residential properties in August. Compact homes continue to be the second preference with a 32% share in August. Homes between 1,000 and 2,000 square feet saw a 16% share, while the share of homes over 2,000 square feet was unchanged at 2%.