In February 2024, Mumbai's real estate market showed a robust performance with a notable increase in property registrations. IGR Maharashtra reported 11,742 registrations, marking a substantial 21% rise from February 2023 and a 7% increase from January 2024. This surge is the highest for any February in the past twelve years, indicating a strong demand for real estate in India's financial hub.
Factors driving this growth include escalating income levels and a positive attitude towards homeownership. Unlike the peak in February 2022, attributed to post-pandemic pent-up demand, the current upswing is primarily fueled by increased income and a favorable homeownership outlook, according to Knight Frank India's analysis.
Despite the significant surge in registrations, stamp duty collections revenue experienced a 22% year-on-year decline, dropping from Rs 1,112 crore in February 2023 to Rs 865 crore in February 2024. This decrease is linked to exceptionally high collections in February 2023, influenced by the government's decision to limit tax deductions on capital gains from residential property sales after March 31, 2023. However, on a month-to-month basis, stamp duty collections saw a positive increase of 14%.
Homebuyer confidence in the Mumbai market remains strong, with a positive sentiment expected to continue. The shift in apartment size preferences was notable in February 2024, with a rise in the share of smaller apartments (500 sq ft and below) to 45%, compared to 34% the previous year.
Preferred locations for property purchases are the Central and Western suburbs, collectively accounting for over 73% of total registered properties. These areas are favored for their modern amenities, good connectivity, and new launches. Western suburb consumers (86%) and Central suburb consumers (92%) tend to buy within their micro-markets due to familiarity with the location and the availability of properties aligning with their budget and preferences.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented on the positive market performance, stating that the Mumbai residential market has maintained exceptional strength in February. The sustained growth in property registrations reflects the market's resilience and allure, expected to continue with robust economic momentum and potential interest rate easing.
In summary, the Mumbai property market is currently thriving, driven by a surge in registrations, rising income levels, and a positive homeownership outlook. Despite a decline in stamp duty collections revenue under specific circumstances, the market displays resilience and growth potential, offering promising opportunities for investors, developers, and prospective homebuyers.