rbi: August sales set new high for Mumbai property market

Property registrations in Mumbai, the country’s largest and most expensive real estate market, saw a 22% year-on-year increase this month as buyers shrugged off rising interest rates. interest and prices, making August the best month in terms of number of transactions and stamps. rights receipts.

The city recorded over 8,310 real estate transactions during the month bringing in over ₹630 crore in stamp duty revenue for the National Treasury, data from the Inspector General of Registration, Maharashtra showed, as the last operational day of August. The number of transaction records was 41% higher than in the pre-pandemic period.

Revenue generated from real estate transactions for the State was more than 50% higher than a year ago, mainly due to the increased contribution of higher value-added segments and an increase of one percentage point of the stamp duty rate.

“August has always been a slower month, seeing a month-over-month decline in eight of the past ten years. The 140 basis point rise in the repo rate, driving higher home loan rates, and the increase had an impact on buyers’ sentiments,” said Shishir Baijal, chairman of Knight Frank India, a real estate consultancy firm. “Despite this, the momentum of home sales in Mumbai is remained relatively dynamic.

Baijal said it may be too early to assess whether the impacts of these rate changes on home sales are long-term and whether homebuyer sentiment will be affected over the upcoming holiday season.

Rajan Bandelkar, Chairman of the National Real Estate Development Council (Naredco), said: “We have seen robust real estate purchases over the past few months as the magnitude of the price increase passed on to consumers has been less than the increase It is very likely that the Indian central bank will raise interest rates further to bring inflation under control, and as a result we have already started to see short-term effects on aggregate housing demand.

With the start of the festive season, he urged the government to offer a stamp duty concession, as had been proposed at the time of the pandemic, to stimulate interest from homebuyers.

With inflationary pressures looming, the Reserve Bank of India (RBI) made three consecutive repo rate hikes totaling 140 basis points over a short duration – from May to August. Anticipation of a rate increase in August had pushed July check-in activity to 11,340.

Homebuyers are now expected to remain cautious as they close deals in anticipation of further rate hikes, which will effectively lead to higher mortgage rates impacting their affordability.