Why there is an Extreme Drop in Property Registration in April?
Mumbai is the battleground of real-estates where property prices are comparatively higher than any part of the country. There is always some kind of cold war in progress, especially for sea-facing properties. While the city of Mumbai registers an increase every year after the closing of the financial year in March, April 2021 saw a different side.
Property registrations have dropped drastically in April with only approximately 7% of people furthering their registration process. However, 93% of the registrations were administered between December 2020 to March 2021.
The Scenarios Between December 2020 to March 2021
2020 was the most volatile year on record for the real estate sector pertaining to the extent of a global pandemic and lockdown. It was unlikely to expect demand stabilisation of property in Mumbai after the great economic fallout. After understanding the virus grew over time, economic activities increased and the market steadily started returning to stability.
While the moratorium on loans and extension of RERA registrations relieved developers, the Maharashtra state government issued stamp duty cuts for property registrations. It seemed to be a successful move as the number of buyers of flats in Mumbai increased significantly, boosting the real estate market.
The stamp duty cut between December 2020 to March 2021 attracted 71, 967 new buyers of property in Mumbai, 44% more than Q1 2020. After registering an impressive Year-on-Year growth of 38%, the trend saw a downfall after the rolling back of stamp duty cuts in 2021.
The Economic Times reports that the Mumbai real estate market saw only about 700 new property registrations in April 2021. The second wave of COVID-19 has also contributed to the momentum.
April 2021: Moving Forward
The Maharashtra state government announced a 1% stamp duty rebate for women buyers, effective from April 1, 2021. While the overall property registrations reduced drastically, the announcement led to an increase of almost 7% in the women real estate buyers. More flats in Mumbai have also been registered by women than before. The move has attracted positive feedback from property buyers all over the state, especially women.
Shishir Baijal – Chairman and Managing Director of Knight Frank India (one of the largest global property consultancy) – says that the Indian residential real estate sector showed a healthy bounce-back of the property registrations during the stamp duty cut period. The demand stimulus offered by the state government also helped the industry inch back into providing employment and economic stability. He also added that this move was a masterstroke by the state government that kept the real estate industry and state’s economy buoyant while the country fought the deadly virus.
The Maharashtra state government’s withdrawal of stamp duty coincided with the second wave of COVID-19 whose extent continues to be ravaging. Combined these incidents led to a sharp decline in property registration in the state as the demand for lockdown seems to be only growing.
The Road Ahead
While our country battles the deadly second wave of COVID-19, the hopes of replenishing industry remain at the corner. The real estate market is only expected to grow once there is a sharp decline in daily cases of the country. While the developer’s cash flow remains at the mercy of the virus, resilience and hope of a better future are keeping the industry on the path.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
