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Mumbai’s real estate sector records its best July in a decade, even as housing loan interest rates rise

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  • The Mumbai real estate sector saw strong growth in both unit sales and value in July.
  • Small houses contributed to half of the registrations, while the average ticket size was ₹1.22 crore.
  • Analysts suggest that the outlook for the real estate sector in India’s financial capital remains robust and organized developers will benefit the most.

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

According to a report by Edelweiss Securities, Mumbai’s real estate sector reported 15% year-on-year growth and 14% sequential growth with 11,340 new registrations in July alone. This is despite the fact that banks and housing finance companies have increased the interest on housing loans by 0.9% since May of this year.

Unsurprisingly, half of Mumbai’s 11,340 houses were in the 500-1000 square meters, suggesting that small houses are driving real estate growth in India’s financial capital.

“Now that the housing cycle is spinning, we think Mumbai property sales would remain healthy despite the rise in interest rates; this would benefit Godrej Properties, Oberoi Realty, Macrotech (Lodha) and Sunteck Realty,” the Edelweiss report added.

Overall, in 2022 to date, house registrations totaled 78,101 units in Mumbai, an increase of 9% year-on-year.

The number of home registrations in Delhi nearly doubled to 10,530 units year on year, but declined by 22% on a sequential basis.

Houses are getting more expensive

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

Overall, the 11,340 new house registrations totaled ₹13,800 crore, up 22% year-on-year.

Particularities July 22 YoY change YTD YoY change
Units 11340 15% 78101 9%
Total value ₹13,800 crores 22% ₹95,500 crore 10%
Average ticket size 1.22 crores 6%

Source: Edelweiss Research

In Maharashtra as a whole, house registrations declined, declining 10% year-on-year to 1.22.601 units.

Overall, however, Edelweiss says the prospects for the Mumbai real estate sector remain robust, with organized developers benefiting the most.

“The market in Mumbai has remained stable despite interest rate hikes and metro charges. An increase in the general level of wages and employment coupled with better affordability and a return to work scenario is expected to keep home buying activity healthy,” the report said.

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