MUMBAI, Jan 24 (The CONNECT) – The year 2021 saw the highest residential registrations in MMR (Mumbai Metropolitan Region) in recent times at about 242,000 units, a 53% increase from 2020 and a 20% increase even over 2019. These statistics and many more analysis are part of the ‘MMR Housing Uptick aided by Support’ research report, conducted jointly by CREDAI MCHI, Colliers and CRE Matrix and released today.
The government in September 2020, reduced stamp duty charges from 5% to 2% for all residential transactions for the period September to December 2020 and 3% for the subsequent quarter of January - March 2021. Other factors such reduced home loan rates, largely stable prices, pent-up demand and a higher inclination to own home too contributed to a spurt in sales during the year.
Boman Irani, Incoming President of CREDAI-MCHI said, a series of positive actions and continuous encouragement by the Maharashtra government ensured that the real estate sector and the overall economy gets a boost.
Premium reductions led to 5x collections as compared to an average year. Further, the reduction in stamp duty helped in doubling the number of flats sold. Notably, almost INR 1.30 lakh crore worth of residential flats were sold in the period of October, 2020 to March, 2021, Irani said.
All of these led to an indirect collection of GST wherein the state received 9% of the construction costs as GST & further 2.5% GST on value of apartments sold. It is a win-win situation for everybody as rationalisation of charges and taxes is leading to overall growth, he said and expressed the confidence that the overall services and employment industry will also benefit from this spillover effect.
Central Mumbai (Dadar, Lower Parel, Worli, Sewri, Mahim, Matunga, Parel, Wadala) saw the maximum revival in sales in 2021. Registrations here rose 93% from 2019 and 71% from 2020. Thane accounted for the highest number of registrations with 42% share, and highest stamp duty collection.
“The year 2021 has definitely been a good year for homebuyers. The numbers show how sops at the right time can boost demand across the segments,” said Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers.
The MMR residential market has shown revival led by a host of prevailing factors. In tune, launches also rose 3% in 2021 as developers launched projects to avail the discount premium while the market was on an uptick. If the demand persists in a similar trend due led by huge propensity to purchase, the market will see better demand-supply equilibrium in 2022,Nair said.
There could also be a 2-5% increase in prices in the latter half of the year. Overall, aspects like easier conversion of land-use, single-window clearances and sops to migrant workers are important for equitable growth, he added.
In MMR, the trigger in home sales in 2021 led to 81% higher stamp duty collections YOY, almost touching 2019 levels. The Brihanmumbai Municipal Corporation (BMC) also saw a massive upsurge in premium collections as it crossed INR 11,000 crore before the end of December 2021. The average collection over the past 10 years have been in the range of INR 3500- 4000 crore, which shot up manifold.
At the same time, in FY 2020-21, property tax collections hit a 10 year-high with collections of INR 5,135 crore meeting 98% of the projected. Property tax is the second biggest source of revenue for the municipal corporation of Greater Mumbai after Goods and Services Tax (GST).
Cut in stamp duty gave fillip to affordable and mid segment (
Luxury comeback: Demand in luxury segment bounced back after several years. Sales in the luxury segment (>INR3 cr) almost doubled in 2021, compared to 2019. Luxury sales accounted for the highest share in three years, at 28% of the sales in 2021. Majority of the sales were in Central Mumbai, followed by Western Suburbs.
While reduction in stamp duty, reduction in premiums and levies and assistance to migrant workers has helped real estate market of MMR gain its lost ground, it is important to provide continued assistance until uncertainty led by pandemic looms over. Implementing some more recommendations mentioned above like continuation in providing concessions and ease in clearances by government will provide the much-needed thrust to the sector and help it remain buoyant.