Indian real estate has historically been very optimistic on the eve of every festive season. The post festive season sales number may not back the pre-festive bullishness, but the sector has been known to be hoping to make merry year after year. After all, real estate is a sentiment driven business and the stakeholders try best to create an ambience of positivity to bring the fence sitting buyers back to the market, often with festive discounts and freebies.
On the eve of this festive season, Track2Realty raises certain natural questions to understand the market depth and ground realities:
What is the overall business outlook on the eve of the festivals?
Is there something different this festive season?
Any reason for being bullish or bearish this time around
Are developers realistic with their expectations
Will there be more launches this festive season?
Are developers ready with their sales strategy this festive season?
Any specific trend that is emerging this time around
There are more questions than anyone could probably answer at this point of time. Overtones are naturally optimistic but these are just early guesstimates. The overt reaction of the industry is nevertheless quite bullish.
Amit Goenka, MD and CEO at Nisus Finance believes developers are rushing to get all the appropriate and requisite approvals and do all the marketing and sales groundwork required for mega project launches this festive season, starting with Dussehra. The expectation within the industry is that this year will be a bumper season and record sales will be registered. This is further enforced by reasonably good sales even during the monsoon season which has traditionally been a slow season for the industry.
“There is considerable euphoria in the stock market and this optimism percolates strongly in real estate too. We may see a slew of new launches this festive season and consumers may look forward to exciting offers in prime locations across the major metropolitan markets. Similar sales may be predicted in plotted projects across the country, including Tier II and Tier III markets. We expect the mid and premium segments to do significantly better than affordable housing projects,” says Goenka.
Aditya Kushwaha, Director and CEO of Axis Ecorp believes post Covid every sector, even tourism or fashion retail, is growing and he does see the same percolating in real estate this festive season.
“Only short-term hurdle is the increase in home loan rates that reduces buyers’ eligibility. Say for instance, someone who could have borrowed INR 1 crore can now borrow only INR 90 lakhs. But overall buying behavior will be bullish,” says Kushwaha.
Abhishek Kapoor, CEO of Puravankara too is quite optimistic for this festive season and his on the ground expectation is that the buoyancy will continue. There is a lot of traction and hence he is expecting this festive season to be good. Are there any risks? Maybe a bit because of the dampening sentiment due to interest rate hike. Because of India’s good procurement strategy of oil and energy, import duty cuts, fuel prices have not gone out of bounds, and overall commodity prices have also calmed down. Our economic activity and tax collection and everything is looking up pretty good. All this will have a positive impact during the festive season.
“If at all, rate hike dampens the spirit, but I am not expecting much out of a minor risk. We believe there will be a lot of new launches this time around. I don’t think there is any fear factor. I rather feel that if there is any country among the BRICS nations, it is India because we have managed ourselves very well. Private investments are going up; job opportunities are looking good; government spending is continuing; and inflation is very much in control compared to the rest of the world,” says Kapoor.
Ashish Narain Agarwal, Founder & CEO, Property Pistol believes festive season has always been a harbinger of uplifted sentiments in the Indian real estate market. In India, owning a home is considered to be one of the most important decisions in an individual’s life and hence the factor of buying a house in an auspicious time takes precedence. This festive season will also reflect similar sentiments like all the previous ones. While the recent increase in the repo rate has triggered multiple opinions and perspectives, the rate at which the demand for homes is picking up surely echoes a bullish festive season for real estate.
“Currently, Indian real estate is bullish with demand-supply movement going strong and hence festive period can be a great opportunity for an increase in sales. While comparing with last decade, the real estate market has evolved and last two years were resilient with lower interest rates and stamp duty rebates. The Q1 2022 has been gaining momentum with buyers being affirmative on property investment. Few situational factors like higher stamp duty and interest rates are considered as temporary scenarios that may not dampen the spirit of buying a property for a well-informed property seeker,” says Agarwal.
On the eve of the festivals, a high rate of economic growth (around 7.5 per cent) amid rising inflation (WPI of 14 per cent) are the main reasons behind robust demand for real estate. Industry insiders assert that real incomes have grown faster than housing prices (around 3 per cent) leading to a perceived affordability of homes. The one exception to this is the PMAY segment where demand may be muted due to lower disposable incomes out of food inflation and this is evident with the slowdown of affordable housing projects in recent months.
One interesting aspect to be seen during the festive season would be the architectural changes with design & functionality. Post Covid, in the emerging reality of Work From Home, many new launches may woo the buyers with a functional office cum home. Of course, it will come at its own cost – either with the bigger homes or with reduced size of other rooms.
Prices may not rise but the increase in input cost would force the developers to cut down on the margins. Overall, it would be an interesting year and the festive season would define the future of Indian real estate in the next two to three years ahead.
Ravi Sinha
#RaviTrack2Media
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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