Mumbai property registrations up 80 percent in Dec but its just an aberration

Propertyregistrationsin Mumbai rebounded in December 2013 signalling fresh interest in the city’s real estate market.

Despite slow sales, property registrations in Mumbai and its suburbs (up to Dahisar in the western suburbs and Mulund in the eastern suburbs) increased 80 percent on month and 12 percent on year to 6,916 units in December 2013, data sourced from Director General of Registrations, Mumbai, showed.

In November, the registrations were down 21.6 percent on month and 12.1% on year to 3,842 units.

“December registrations figures are the highest number of registrations after calender year (76,300) which was more of an aberration year as property prices had corrected,” said Parikshit Kandpal, real estate analyst at Karvy Broking.

December typically sees the highest number of registration as customers rush to register their properties before the ready reckoner (RR) rates are revised on 1 January every year. This year too the RR rates were increased by 5-20%.

[caption id=“attachment_67231” align=“alignleft” width=“385”] Mumbai CY13 registrations at par with CY10: Source Karvy Broking[/caption]

However, Kandpal expects registrations to grow 12 percent this year due to a pick up in the pace of new launches with the recast of the Maharashtra Environment Committee as well as the CM’s stamp of approval on crucial FSI regulation for special townships and push for big infra projects.

During the financial year thus far, the registrations have grown 7 percent to 46,706 units from 43,706 a year ago, led by a 24 percent on year growth in the island city registrations, but a muted 4 percent growth in the suburbs.

“YoY registrations usually get recorded with six months lag which is typically the time between soft launch and hard launch wherein banks start giving loans hence this data doesn’t mirror the current state of real estate sales and has to be taken with a pinch of salt,” said Kandapal.

Moreover, while the new launches have been muted (a 40 percent year-on-year decline), the resale market is what is driving the growth in registrations.

Secondly, the recent launches have seen a mild success due to the discounts being offered by builders.

For instance, Runwal Forest (Dec-13) witnessed strong demand with 450 apartments getting sold during the pre-launch period due to a 10 percent discount offered by the Runwal Group.The pre-launch price was Rs 9,900-10,500 a square feet against the current prevailing rate in the vicinity projects Rs11,500-13,500/sqft).

“Latent demand has been hitting markets depending on price affordability. In the past, other projects like.Kalpataru Sunrise, Thane (out of 600flats, 450 sold in a month) and Lodha Rise, Dombivili (out of 6,000 flats,2,300 sold in a month) had also met with similar response as pricing was 10-15% below market rates,” said Kandpal.