October marks the beginning of the festival season in India. Market sentiments around this time are high, not just because festivals are considered auspicious for big purchases such as property, vehicles, gold and so on, but also on account of the host of lucrative deals and discounts on offer. The business community in India considers this the best time for a new launch in the market so as to garner the highest sales.
“The single month of October is good enough time to make a comeback in any industry in India. And real estate is no exception,” says Ritwik Das, managing director, Bluechip Projects Private Ltd, a leading realty player in Kolkata.
And the sector is already seeing signs of recovery if one goes by Research, Data and Analytics platform, PropEquity. “This year the festive season has begun early and now we are witnessing the green shoots of recovery in the real estate sector specifically mid and affordable housing. Last November, the Demonetisation severely impacted the real estate sector leading to low transactions. This year, developers are launching new projects after ensuring compliance under RERA . There is definitely a solid demand for ready-to-move-in properties,” says Samir Jasuja, CEO & Founder, PropEquity.
He adds, “We expect this festive season to do better than last year as developers are not just as selectively launching new projects but also offering lots of freebies and discounts to clear their earlier stock. There is lot of unsold inventory, which is nearing completion.”
Surendra Hiranandani, chairman & MD, House of Hiranandani concurs, “We are witnessing higher traction in the market ahead of the festive season. The implementation of RERA has seen a deceleration in new launches, but the demand for well-thought out products continues to be robust. Owing to the ongoing transformation, developers are offering attractive rates and payment plans. For consumers, this looks like an ideal time to secure great deals, especially on ready-to-move-in projects. The demand is also expected to pick up because of the reduced availability of under-construction homes owing to pending RERA registrations.”
He points out that they are already witnessing large volumes of sales in under-construction homes in the affordable segment, while in the mid and luxury segment, the demand is higher for ready-to-move-in properties.
“The influx of liquidity in the system has ensured attractive home loan rates, which combined with the positive effect of the GST on ready-to-move-in homes might turn fencesitters into buyers. Today customers can book by doing full cheque payment with no hidden costs and expect assured delivery for under-construction projects due to stringent provisions of RERA. For home buyers, this is a golden period to invest in property and enjoy long-term capital appreciation,” says Hiranandani.
Expectedly, the stakeholders are latching on to the opportunity created out of this positive sentiment. Real estate platform Housing.com is running ‘Home Utsav’, an online real estate festival with special offers and deals from renowned developers across the country. The month-long festival started on September 28 and will continue till October 28 during which more than 100 reputed developers such as Hiranandani Constructions, Mayfair Housing, Runwal Group, Kukreja Constructions, Rajesh Lifespaces, Purvankara, Prestige, Mahagun Group, Vipul Group, Gaurs Group, Gera Developers, Ramky Estates & Farms, Shrishti Group and many more will be able to showcase their more than 200 selected projects to prospective buyers. Housing.com aims to reach out to more than 7 million users on its platform, and 20 million users across digital channels to generate maximum impact for both the buyers as well as developers from the festival. Not just great deals, in case of immediate bookings, there are also special incentives for buyers such as European holiday for couples, GST waivers, Diwali gift hampers worth Rs 1 lakh, etc.
Says Mani Rangarajan, CBO, Housing.com, “After the prolonged slowdown, the real estate sector is expected to witness revival this festive season. To cater to the strong underlying buyer interest which surfaces during festive periods, we decided to launch Home Utsav. It’s a unique event with participation from top developer brand names enabling consumers to make the right home buying decision in the localities of their choice. We also expect an increase of more than 30 per cent in overall monthly traffic to Housing.com this season.”
But amid this buoyancy, there’s no dearth of naysayers, like Akshit Shah, AVP - Capital Markets Research of JLL India, whose counter the market mood with both their experience and foresight. According to Shah, the hypothesis that residential property sales pick up markedly during the festive season was valid pre-2010, but does not hold water today for several reasons.
One, the average age of home buyers has come down from the mid-50s to the mid-20s. The younger generation prefers to take informed decisions and focuses on better bargaining opportunities rather than auspicious days to purchase property.
Two, the service industry is growing rapidly, and now contributes over 55 per cent of India’s GDP. A larger part of this industry announces salary hikes and bonuses in the second quarter. The manufacturing and trading industry, on the other hand, announces bonuses during Diwali — which falls in the fourth quarter. Many people belonging to the upper-middle and high-income groups plan their investments during the first quarter, for effective tax management purposes.
In short, the trend has changed, and the seasonal impact on housing demand is a thing of the past. If the first half of the year has not seen good business, it is quite futile to expect the remaining half to compensate for the deficit. In any year where such a scenario has played out, it does not make sense for developers to bank on the festive season to bring a significant change in fortunes, says Shah.
Doubts notwithstanding, the industry is working to make the most the most of the celebration time.