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The festive season is when people usually loosen their purse strings as this is an auspicious time to buy a home.
Usually, this means a windfall for developers. But with the property market in a trough, is there any reason for optimism?
Realtors list 3 key factors that drive the performance of the property market during a festive period inventory, interest rates and offers.
“The realty sector has been moving at a slow pace for the last three years, which is why it is facing high unsold inventory. Reasons range from new policies being implemented, to property prices, delays in approval processes and a funds crunch,” says Manju Yagnik, Vice-Chairperson, Nahar Group.
Inventory
Yagnik says these developments have shaken the trust of home buyers, who have heard and read about delays in projects being handed over. “Today, home buyers are hesitant to buy in an under-construction property as they are not sure whether the project will be completed,” she says. That’s why ready homes are looking more attractive than ever.
Interest Rates
Tempting interest rates on home loans are the second reason realtors are expecting to do brisk business. Interest rates have declined significantly since last year’s festive period and developers are expecting festive rate cuts by banks. If the Reserve Bank of India obliges, sentiment will get a boost.
Attractive Offers
The third key driver is offers and discounts from developers. Developers are sitting on huge inventory and, to attract buyers, the offers would have to be bigger than ever.
“Generally, developers extend a host of offers during the festive season. However, real estate is a capital-intensive investment and should be based on thorough market research. Offers should not be the sole reason one invests one’s life’s savings in a project. The house you are buying should serve the purpose of investment,” suggests Surabhi Arora, senior associate director, Research, Colliers India.
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