Property transactions (sales and purchases of residential and commercial properties) in Greater Mumbai during January-March 2012 have fallen by an average14.80% compared to 9.11% during corresponding period of last year. However, there has been 11.72% rise in leave & licenses agreements against 10.37% during the same period. According to the compilation made by the state stamps & registration department, in Mumbai taluka, which includes Colaba to Sion and Mahim, 811 transaction against 899 in January (minus 9.79%), 664 against 823 in February (minus 19.32%) and 942 against 1030 (minus 8.54%) took place. On the other hand, 969 leave and licenses agreements were registered in January against 840 in 2011 (15.36%), 898 against 824 in February (8.98%) and 1113 against 995 in March (11.86%).
A senior state government official, who did not want to be identified in view of the ongoing budget session of the state legislature, told Business Standard "The fall in property transactions in Greater Mumbai during January-March 2012 was largely due to higher prices, 1% VAT, higher interest rates, stamp duty and imposition of service tax. Curiously, there has been increase in leave & licenses agreements. There has been maximum number of leave and licenses agreement in Goregaon & Borivli area of north Mumbai due to less rents. For a Rs 1 crore residential flat in this region the rent charged is Rs 20,000 per month while for a buyer of a flat priced at Rs 50 lakh a monthly EMI comes to Rs 50,000." The official indicated that the government is in the midst of revising the stamp duty rates for leave and licenses in a bid to mobilise much needed additional resources.
In Borivli taluka, which covers western suburbs of Goregaon to Dahisar, 3,685 against 2,914 leave and licenses agreements reported in January (26.46%), 3,599 against 2,859 in February (25.88%) and 4,223 against 3,458 in March (22.12%). However, property transactions have fallen to 1512 in January against 2139 last year *minus 29.31%), 1555 against 2,182 in February (minus 28.74%) and 2007 against 2533 in March (20.77%).
According to Crisil Research in its recent report, despite a 40 per cent decline in new home sales in 2011, new home prices in the financial capital of the country is unlikely to decline this year.“Notwithstanding a 40 per cent dip in sales of new homes since mid-2011, a sharp rise in construction and funding costs in addition to amendments to the Development Control Regulations (DCR), would increase costs for builders and prevent a reduction in home prices.