How was the festive season for property market this year? The answer depends upon whom are you addressing the question. For the large universe of the developers, it was worse festive season in the last 5-7 years. But for a few select listed developers, the fortunes are different. The ground reality of the market is that Diwali fireworks was definitely missing for Indian real in 2024, despite over optimism and influence peddling ahead of the festive season. Track2Realty analysis.
Much before the festive season, the developers had claimed 20-40% sales jump to be this time around. But then the stakeholders in the sector are known to be over-optimistic, despite being proven wrong time and again.
Taking stock of the market this festive season, most of the developers have reported much less than expected sales this time around. There are reports (and reports mean acceptance) of 10-15% drop in sales; the real drop is much more. Add to it, no major launches this festive season across the cities of India and you get a clear picture.
Now we will see justifications, that will yet again claim higher buyer confidence and Indians dying to buy a house. Technical reasons would be blamed for unimpressive festive performance this year; something that would be brushed down the carpet as an exception.
Reasons and justifications of festive dampener would be:
Bookings in Q2 were hit due to delay in clearances and subsequent decline in launches
Higher property prices
Delayed Monsoon delaying new inventory
Delayed approvals due to State elections
The fact is that for the independent analysts this festive season was anyways expected to be a market dampener. It was writ large on the wall. But the stakeholders neither accepted it nor took any course correction.
Real reasons of a cold property market ahead of colder season are:
Inflation eating household savings
Artificially inflated prices
More luxury & super luxury inventory
Prices appreciation not in sync with market reality of either inflation or wage growth
Job degrowth
Bonus & increment less job market
Stakeholders are not even ready to acknowledge that sales have run fast in the last four years. How long would that last? Post Covid market was an exception and not a reality of long-term rally. The projected rally of 10-15 years was always questionable.
Listed Developers will definitely have more optimism than the rest of the market. But the larger issue is whether the real estate market will learn its lessons.
Will they acknowledge that they are not in sync with the real demand & affordability of vast majority of the Indians?
Will they admit that gone are the days when a gold coin or iPhone was a magnet for the buyers in the property market?
Most importantly, will they admit that the false narrative could only bring them this far and no further?
Your guess is as good as mine.
And for the media parrots, who are always party to the builders’ false narrative, it is yet again egg on the face. But then who cares in the rotten world of Indian real estate?
Track2Realty View
The stakeholders in general, and the developers in particular, need to be realistic and grounded. They need to acknowledge that their overt-optimism alone is not enough to accelerate the sales velocity. They need to get in sync with the buyers’ needs, preferences, and, most importantly, affordability to customise their offerings. Moving up the value chain of luxury is a recipe of disaster and that could only drive the sector to a market crash.
Ravi Sinha
Twitter: RaviTrack2Media
Ravi Sinha is a journalist with over two decades of cross-discipline media exposure. He is the CEO of real estate thinktank group Track2Realty. He has been writing extensively on the real estate sector for more than a decade now. Evaluation of real estate brand performance is his core domain expertise and he has immense insight into consumers’ psychograph. He has conceptualised Track2Realty BrandXReport as India’s 1st & only objective & non-paid brand rating journal that is industry-accepted benchmark of brand equity & ranking of the Indian real estate companies.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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