Findings from my visit to Mumbai’s property registration offices

Property registrations in December 2020 will be setting new records. From an average monthly figure of around ~6,000 units over the last 3 years, this December it will exceed 15,000 and may even hit 20,000 units. Credit where due: I have never ever seen such coordination among all stakeholders to boost demand. Several developers have slashed prices to levels that have even surprised someone like me who has been extremely bearish on prices. Government’s time-bound stamp duty cut has spurred people to close transactions. Interest rates are low and some lenders are offering even promotional offers for the first year.

While I keep speaking with stakeholders from the industry, there is nothing quite like visiting a registration office and seeing the action. Below are my findings and while they may not be fully representative of the Mumbai market – but I think it will be a close indicator of reality

  • Registration: There was a flurry of activity at the registration office. According to one key agent at one of the registration office – deals happening daily are 3x of the earlier record. Customers however lament that the process is not fast enough from the side of the registration office.
  • Cancellation and Re-registering: One phenomenon playing out was that old transactions that had been registered with the builder, were getting cancelled and thereafter getting re-registered at new stamp duty levels. Refund normally takes time but stakeholders have clearly inferred it is worth it. Data shows that the cancellation numbers are however not meaningful enough.
  • Buyer sentiment: It is hard to find a satisfied buyer at a registration office. Everyone has the same sentiment “I could have got a better deal.” On further probing on the price they paid, most deals have gone at prices lower by 12-15% compared to pre-COVID levels. Combine that with the stamp duty cut and the cost of ownership is down meaningfully to a neutral observer. I genuinely hope many of these buyers talk to their neighbors who purchased earlier and recognize the type of deal they have received now.
  • Registration for deals done even 5 years back: With the ‘letter of allotment’ strategy employed by many buyers and developers – there are registrations for deals done several years back. Buyers who bought in 2016, 2017 and planned to register close to possession are making the move to register now.
  • Ecosystem sentiment: The most striking thing about talking to stakeholders is that absolutely NO ONE is excited about the future. Be it the agent, lawyer or even veteran xerox copy staffer that are housed outside the registration office. They anticipate this rush on registration fizzling out once the stamp duty support move by government is removed. Then the industry will again get back to the old, slow numbers.

All in all. Stakeholders have done their bit to stimulate action. But to sustain it – will be a tough task.

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