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Real Estate: September numbers for Mumbai a positive

Apartments with value of more than Rs 10 mn logged brisk sales. YTD registrations at ~86,000 units are up ~3x y-o-y off a low base.

The number of housing units registered in Mumbai in Sep-21 jumped 39% y-o-y to 7,804 (up 15% m-o-m); this is the best September performance in a decade. And compared with pre-pandemic Sep-19, registrations are 94% higher. Furthermore, 94% of registrations pertain to new home sales compared with ~45% over April to August this year. Apartments with value of more than Rs 10 mn logged brisk sales. YTD registrations at ~86,000 units are up ~3x y-o-y off a low base.

Real Estate: September numbers for Mumbai a positive

With the second wave subsiding, we believe Mumbai realty sales would revive; this will particularly benefit Godrej Properties, Oberoi Realty, Macrotech (Lodha) and Sunteck Realty.

Mumbai registrations sustain uptrend; new sales catapult
Monthly registrations in Mumbai during September surged 39% y-o-y to 7,804 units; that Sep-20 benefitted from lower stamp duty makes current performance all the more heartening. MoM too registrations are up 15%, signifying buoyancy in housing demand. The overall value of units registered in Sept-21 stood at ~Rs 106 bn (up 17% y-o-y, 26% m-o-m).

According to Knight Frank, 94% of registered homes during Sep-21 were fresh sales. For Maharashtra at large, registrations in September at 97,873 units declined 7% m-o-m and 23% y-o-y. YTD registrations in Mumbai at ~86,000 units are up about 3x y-o-y off a low base.

Average ticket size up MoM in Mumbai
The average ticket size in Mumbai in September rose 9% m-o-m to Rs 13.6 mn (down 16% y-o-y). This is more or less in line with the average ticket size of Rs 13.4 mn during CY19. According to Knight Frank, the share of houses worth Rs 10 mn and above increased to 49% in September, compared with 30% in April and 40% in June. This marks a reversal of a trend—from a rising share of affordable units.

Outlook: Organised developers likely to benefit
As argued earlier, consolidation is the driving feature of India’s property space and Covid-19 has only accelerated the process. We believe Mumbai housing sales will revive as the city opens up fully post-lockdown; 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) will benefit from revival in housing sales in Mumbai.

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