Mumbai’s real estate sector registers its best July in a decade even as home loan interest rates rise

Tue, 08/02/2022 - 06:06

Author: Rounak Jain

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Mumbai’s real estate sector registered its best July in a decade, despite the rise in interest rates, and this could benefit listed real estate companies like Godrej Properties, Oberoi Realty and others.

According to a report by Edelweiss Securities, Mumbai’s real estate sector reported a 15% year-on-year growth and 14% sequentially with 11,340 new registrations in July alone. This is in spite of banks and housing finance companies raising interest rates on home loans by 0.9% since May this year.

Unsurprisingly, half the 11,340 homes in Mumbai were in the 500-1,000 square feet bracket, suggesting that small homes are driving real estate growth in India’s financial capital.

“With the housing cycle turning, we believe, Mumbai realty sales would continue to be healthy in spite of the increase in interest rates; this would benefit Godrej Properties, Oberoi Realty, Macrotech (Lodha) and Sunteck Realty,” the Edelweiss report added.

Overall, home registrations in 2022 till date stood at 78,101 units in Mumbai, up 9% year-on-year.

Home registrations in Delhi nearly doubled to 10,530 units year-on-year, but declined 22% on a sequential basis.

Homes are getting expensive

According to the report, the average price of a new home registration in Mumbai stood at ₹1.22 crore, up 6% year-on-year.

Overall, the 11,340 new home registrations tallied up to ₹13,800 crore, up 22% year-on-year.

In Maharashtra as a whole, home registrations dwindled, falling 10% year-on-year to 1,22,601 units.

Overall, though, Edelweiss maintains that Mumbai real estate sector’s outlook remains robust, with the organized developers standing to benefit the most.

“The Mumbai market has been stable despite interest rate hikes and levy of metro cess. Increase in the general level of wages and employment opportunities coupled with improved affordability and return-to-work scenario is expected to keep the home buying activity healthy,” the report added.

Source:Business Insider

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