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House registrations surge in December

The number of housing units registered in Mumbai in Dec-21 increased 28% MoM to 9,681 (down 51% YoY). The YoY decline is attributable to the lowest stamp duty rate of 2% a year ago. With the increase in the number of registrations, the value of units registered during the month at ~INR152bn is up 38% MoM (down 55% YoY). Total registrations in CY21 at ~111,914 units were up 71% YoY, valued at INR1,426bn (up 42% YoY). This was despite the withdrawal of lower stamp duty 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 increase

Monthly registrations in Mumbai during December decreased 51% YoY to 9,681 units. This was because stamp duty rate was at its lowest level of 2% in the same period last year. However, MoM registrations were up 28%. Registrations in Dec-21 were also 50% higher than the pre-pandemic period of Dec-19 setting a 10 year high record for the month of December (barring Dec-20). The overall value of units registered in Dec-21 at ~INR152bn was up 38% MoM (down 55% YoY). Total registrations in Mumbai in CY21 stood at ~111,914 units (up 71% YoY). This came in even despite the lower stamp duty benefit not getting extended beyond Mar-21. The value of properties registered in CY21 at INR1,426bn was up 42% YoY. For Maharashtra at large, registrations in December at 138,066 were up 33% MoM but down 46% YoY.

Average ticket size up MoM in Mumbai

The average ticket size in Mumbai in Dec-21 increased 8% MoM to INR15.7mn (down 10% YoY) despite INR10mn-and-below segment dominating the market with a share of 53%. Share of the INR10–50mn segment was 42% in Dec-21.

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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