Festive Fervour To Perk Up Realty The festive season is the most auspicious time to buy a property. People wait for the auspicious season to close the deal. There are some traditional values attached to the festive season. For some, the festive season is directly linked with ‘good luck’ – and for others, the festive season also brings sweeteners and special deals and offers from real estate developers
Elaborating further, Ashwinder R Singh, CEO, Residential at Bhartiya Urban, says, “Mid-October to November is considered the most profitable period for developers and the real estate sector, the reason being India’s much-awaited festive season. For the longest time, it has been ingrained in Indian minds to make big lifetime investments on auspicious days. Additionally, the festive season lifts everyone’s spirits, which also leads them to celebrate with a grand event – a big lifetime investment. All these factors cause developers and marketers to come up with unbelievable deals and offers to entice customers into investing in real estate. Home financing companies also seize the opportunity to boost their sales and gain profits during this period. However, the question arises whether Covid-19 poses a threat to this yearly profit that real estate developers have witnessed in the past years.”
Singh adds, “While the gloom of the pandemic still lingers in the air, offers and deals will be a major contributing factor to the overall success rate of sales during the festive season. With the pandemic affecting the real estate sector to a great extent, developers will look at pushing offers more aggressively to attract new customers and gain traction. An added benefit of the effects of the pandemic is the value of homeownership that has since grown to a large extent among the target market, which would also help in sustaining the usual success witnessed by the real estate sector.”
Ravindra Sudhalkar, CEO at Reliance Home Finance, says, “Historically, we have seen a spike in residential real estate sales during the festival season as it is considered auspicious to buy the property during this time of the year. Besides, it is also a time when real estate developers, as well as banks and housing finance companies, come up with attractive offers and discounts. Even at the time of the pandemic, we witnessed real estate demand moving northward, especially last year and this trend is likely to continue from October through the end of the year. This year, there is a double positive of an already record-low interest rate regime and price correction in some markets. We expect housing sales to rise 15-20% sequentially owing to low base on account of Covid-19 second wave as customers unleash pent-up demand.”
Incentives and offers
Although wooing investors to new projects with incentives and offers has been a practice in preceding years, the pandemic has raised a demand for ready-to-move-in properties as more and more people worked from home. Therefore, the sales of ready-to-move-in homes will see a comparatively bigger increase than under-construction projects.
This will also be beneficial for real estate developers that are trying to offload existing inventories. Some state governments might offer stamp duty cuts during the festive season to boost demand in the sector. We also expect online home sales to gain more traction in the festive season.
Homes sales already up
Gaurav Kumar, managing director, Capital Markets and Residential Business, CBRE India, says, “Home sales across India have surged significantly despite the pandemic. Homeownership has become a priority, with businesses focusing on remote work – and the homebuyers’ need for bigger spaces. This, backed by the government’s initiatives to make housing affordable for all, has aided a strong recovery for the residential sector across the country. With the government’s mass vaccination initiatives, we can expect further growth in the residential sector in the upcoming festive season. Historically, the festive season in India has always been considered an auspicious time to make home purchases, aided by lucrative schemes by developers.”
The forthcoming festive season, coupled with factors like low-interest rates, is expected to be a very strong period for home sales.
Vikas Bhasin, managing director, Saya Homes, says, “The festive season is the most-awaited time when the majority of the homebuyers are most likely to make high-ticket purchases. Commencing from Ganesh Chaturthi and culminating at Diwali, the period in between is considered to be the most auspicious time to invest in anything new. With several attractive offers on the ready-to-move-in property, the festive season surely is an excellent time to invest in real estate. Besides this, some of the other factors such as low-interest rate on home loans also help the fence-sitting home buyers at the time of purchase.”
Auspicious affair
Kapil Malhotra, principal partner and director sales, Square Yards, says, “Buying a home during the festive season is considered an auspicious affair in India, known to usher in good fortune, health, positivity and happiness to buyers. This season comes with appraisals, bonuses, and perks at workplaces, providing a handsome amount of disposable income for buyers, that eggs them on to purchase their dream home by shelling out a down payment. Real estate developers also pull all stops to cash in on this once-a-year festive jamboree, offering cash benefits, lucrative discounts, and stunning pre-payment plans, creating a flutter in buyers for homeownership. With the homebuying sentiment on the up, post the second Covid wave, it is expected that the demand for homes in the mid-segment and luxury categories will be at the zenith in the coming months due to low home loan rates, stable property prices and a strengthening GDP graph. Since the cost of acquiring a home is the lowest during a festive season, homebuyers including NRIs would be looking forward to fulfilling their desire of buying a home, even if that means stretching their budgets to secure larger homes.”
Bijay Agarwal, MD, Salarpuria Sattva, says, “Today, the residential segment looks very promising as buyers including millennials are looking at owning a home rather than be dependent on rental accommodation. Developers across the country host a plethora of offers to attract potential buyers with flexi-payment options, during the auspicious festive period starting from October-December. Benefits on registration and stamp duty payment are already offered by the government. Bankers and financial institutions are also catering to demand by announcing attractive home loan offers. New launches with latest amenities are planned during the festive season.”
Developers are sensing a renewed optimism as compared to the last time.
Niranjan Hiranandani, national president, NAREDCO, says, “Real estate buying is largely sentiment-driven, and homebuyer sentiment is at its peak during the festive season. This is because many Indians believe that the festive season has ‘positive vibes’ and that on some specific festive days, it is auspicious to either book or buy one’s own home. For some homebuyers, the festive season is associated with ‘good luck’ – and for those who do not subscribe to such theories, the festive season also brings sweeteners and special deals and offers from real estate developers, which ends up being a win-win to buy a home during the festive period.”
This year, the second wave of Covid-19 has created a situation where many have realized that the safest place to be during the pandemic is ‘one’s own home’, with the result that ‘traditional renters’ (the new Millennials) are turning into first time home buyers. ‘Work and study from home’ have resulted in existing homeowners ‘upgrading’ to larger sized homes, to suit the requirements of the ‘new age’ where humankind co-exists with Covid-19.
“The positive impact of the vaccination process has also spurred demand for homes, and these are expected to peak in the festive season. So, different reasons for different segments of home buyers; but it definitely is a positive time for real estate – this year too, the festive season is expected to witness ‘more than normal’ sales, providing a boost to housing sales across cities in India,” Hiranandani adds.
A real estate expert says, “Purchasing any property during the festive season is becoming increasingly popular as it is considered an auspicious time for buying a home. The season typically starts off around Ganesh Chaturthi and is followed by the Navratris, Dushera and reaches its peak by the time Diwali comes around mid-November. The festive period is also a good time for home refurnishing and renovations. With several pujas and auspicious events lined up several homeowners look to this time of the year to re-do their homes. From new furnishings to a new coat of paint, appliances, and various others. There are a great many options to choose from and the Indian homeowner. As a result of which developers plan their project launches to coincide with the season. With this, developers offer freebies such as white goods, low mortgage for rates a fixed period and subvention schemes to garner maximum bookings during this time. This is mostly targeted at the fence-sitters to push them into making a purchasing decision.”
Festive spirit
Here are some of the main reasons that could prove to be contributing factors to the success rate of sales during the festive season for developers:
– Common notion among buyers that the festive season is an opportune time to make a big lifetime investment
– Decrease in home loan and home financing options caused by the pandemic
– Significant drop in property and down-payment prices
– Festive discounts and offers that are readily available during this auspicious time
– Decrease in stamp duty rates
– Availability of ready to move-in units across the country
– With decent demand in the market, it is a win-win for homebuyers and developers
– An increase in bonuses, appraisals, and perks at workplaces causing people to have an indisposable income which further allows them the opportunity to invest in properties/homes
Good time to buy
Home loan rate of interest is at an all-time low (below 7%)
Developers offer many discounts and freebies with booking
Developers target the fence-sitters
Price level across the market is stable
Source – Times Property
