Bottom Line: Festive sentiment is not driving the Indians to property market anymore, finds a Track2Realty pan-India survey.
Nearly two third of the prospective home buyers, as many as 62 per cent would not buy their dream home this feative season. Expectations of a possible price corretion is the biggest deterrent to commit for a house purchase this year and as many as 38 per cent of the Indians in the ten key cities would wait & watch the market movement.
Nearly as many, 36 per cent, would not commit due to the job market uncertainties. Rest 26 per cent of the home buyers have other issues, including economic uncertainties, affordability, stages of construction and not finding a house of one’s choice.
These are the findings of a pan-India survey by Track2Realty, real estate thinktank group. Track2Realty conducted this survey in eight key real estate markets – Delhi-NCR, Mumbai, Pune, Ahmedabad, Bangalore, Chennai, Coimbatore and Chandigarh. The primary idea was to understand as to how far the festive spirit works in the housing market when the overall sentiments are down and macro economic issues are affecting the builders and the buyers alike.
Key findings
- 62% Indians would not buy their dream home this feative season
- 38% expect price correction; 36% fear job uncertainties; and 26% have other financial issues, including economic uncertainties, affordability, stages of construction and not finding a house of one’s choice
- 78% fear that emotional impulse of buying a house in festive season may land them up in wrong project
- 88% maintain that availability of ready to move house; pricing; and amenities are prime criterion to pick a house
- 72% are not attracted to the marketing offers any more
- 68% believe new launches during the festivals are risky
The study noted that nearly two third of the Indians, 64 per cent, still believe in the festive spirit and auspicious muhurats, yet when it comes to home buying they would go by the pragmatism. The home buyers have, of late, turned very mature in their decision making and have more access to information about the market conditions and property dynamics. One 12 per cent of the respondents admitted that festive spirit would be the primary catalyst to make up their mind to buy a house now.
“If I buy a house now and tomorrow the prices crash, as expected and confirmed by the media reports, then my auspiciousness will go for a toss. I would not deny the importance of muhurats but then the market dynamics has to be factored in for a high value purchase like house. It is not wise to get carried by festive spirit alone,” says Gaurav Gupta, a prospective home buyer in Noida.
The larger universe of the home buyers, 78 per cent, are very clear that emotional impulse of buying a house in festive season may land them up in wrong project. There, of course, is a change of mindset among the first time buyers and the repeat home buyers. More first time home buyers, as many as 26 per cent, are determined to buy it during the festivals, as against only 12 per cent repeat buyers.
Contrary to the general perception that the young buyers are not botherd about festive spirit, the study noted that there is no generation gap as far as belief in auspicious muhurat is concerned. While 58 per cent buyers above the age of 50 strongly believe in it, 42 per cent young buyers equally believe in regious fervour.
Among the buyers who are booking their house this festive season the study tried to understand their priorities. Nearly all the buyers, 88 per cent, maintain the following factors as prime criterion to pick a house:
- Availability of ready to move house
- Pricing
- Amenities
This raises a fundamental question as to whether the symbolic discounts & freebies would no longer work in the housing market. A vast majority of home buyers, as many as 72 per cent, are not attracted to these offers any more. Similar number of people, 68 per cent maintain that new launches during the festivals are risky.
“Any product packaging has to cater to the real need of the buyer. For long the real estate remained exception due to huge demand in the market but the slowdown and slow sales have taught the developers few valuable lessons. Across the Mumbai market the developers are offering real discounts this time around,” admits Ratnakar Shetty, a local broker.
For those who are buying this festive season, Dhanteras seems to be most auspicious time with as many as 78 per cent respondents saying they would book their flat this day. Navratra, of course, ranked second in terms of choice of date of booking.
“When the market was appreciating the home buyers were more festive driven as appreciating asset is always auspicious. Nothing hurts auspiciousness more than the fear of depreciation. I don’t think the festive spirit has lost its significance any way but since the property is not appreciating at the moment, at least not to the desirable extent or compared to even the safest bank fixed deposits, people are looking for right opportunity than right time,” concludes Mayank Tiwari, a financial analyst.
Such counter views notwithstanding, the survey clearly shows that the festive season would be witness to a slow sales. The festive spirit alone can not revive the real estate market, as the home buyers are more cautious in their cost & benefit analysis of a high value investment like the real estate.
