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House registrations decrease

The number of housing units registered in Mumbai in Nov-21 dipped 18% YoY to 7,582 (down 12% MoM). The YoY decline is attributable to the lowest stamp duty rate of 2% a year ago. Despite the decline in the number of registrations, the value of units registered during the month at ~INR110bn is flat MoM (down 24% YoY). YTD registrations at ~102,200 units (up 122% YoY) are highest in a decade while YTD value at INR1,275bn is up 93% YoY. This is so even though lowerstamp duty benefits were not extended beyond Mar-21.

With the housing cycle likely turning, we believe Mumbai realty sales would continue to be strong; this would particularly benefit Godrej Properties, Oberoi Realty, Macrotech (Lodha) and Sunteck Realty.

Mumbai registrations witness a decline

Monthly registrations in Mumbai during November declined 18% YoY to 7,582 units. This is because stamp duty rate was at its lowest level of 2% in the same period last year. MoM too, registrations were down 12%. Despite the MoM decline in registrations, the overall value of units registered in Nov-21 at ~INR110bn was flat MoM (down 24% YoY). YTD registrations in Mumbai crossed the 100,000 mark for the first time in a decade and stood at ~102,200 units (up 122% YoY). This came in even without the extension of lower stamp duty benefit beyond Mar-21. The previous high was ~80,750 units in 2018. The YTD value of properties registered at INR1,275bn is up 93% YoY, off a low base.

For Maharashtra at large, registrations in November at 104,014 declined 3%/25% MoM/YoY.

Average ticket size up MoM in Mumbai

The average ticket size in Mumbai in November increased 13% MoM to INR14.5mn (down 6% YoY) despite the share of INR10mn-and-below segment increasing to 58% in Nov-21 from 51% in Sep-21. This is also higher than the average ticket size of INR13.4mn during CY19.

Outlook: Organised developers likely to benefit

As argued in our comprehensive sector report Real Estate – Leadership matters, consolidation is the driving feature of India’s property space and covid-19 has only accelerated the process. We believe momentum in Mumbai housing sales would sustain in the festive season. While matching the FY21 performance in absence of a stamp duty relief is a tall order, we believe the housing market is reviving nonetheless.

We believe Mumbai-based organised developers such as Godrej Properties (BUY), Oberoi Realty (BUY), Sunteck Realty (BUY) and Macrotech Developers (BUY) would benefit from revival in housing sales in Mumbai.

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