Real estate developers in India are pinning their hopes on the upcoming festive season to mark a change in their fortunes even as they struggle to survive in a market that is fraught with issues ranging from severe financial crunch to muted buyer sentiment. Housing.com’s ‘Home Utsav 2019’ has kick-started with the Navratras and will carry on till Diwali since home sales increase during the festive season in India. Often times, festive offers spill all the way until the start of the New Year.
Last year, for instance, close to 90,000 housing units were sold during the October-December quarter, the highest sales number achieved by developers in a single quarter in FY 2019, in India’s nine prime property markets, as per the data available with PropTiger.com.
“Noteworthy is the fact that sales increased by 30% year-on-year during the quarter (Q3FY19). More importantly, home sales in all the cities coved in our analysis, except Gurgaon, increased during the quarter, primarily because of the festive spirit kicking in. Further, home sales improved last year despite the fact that interest rates were much higher than they are now. Discount offers by builders launched during the festive season are a big factor in helping them clock better sales. Historically, too, buyers are more likely to invest in property during this season when compared to any other time of the year,” says Amit Masaldan, Business head, Housing.com and Makaan.com.
During the last festive season, the repo rate, the rate at which the Reserve Bank of India (RBI) lends money to financial institutions, stood at 6.50%. Consecutive reductions by the RBI have now brought the rates down to 5.40%, resulting in banks offering home loans at rates as low as 8.35 per cent currently.
Commenting on this, Mani Rangarajan, Chief Operating Officer, Elara Technologies said, “We expect better sales this festive season since many steps have been taken by the government in the past one year that makes property purchases more lucrative for buyers today than ever. In the Budget 2019-20, it was announced that buyers would get an additional tax deduction of Rs 1.50 lakh annually on the home loan interest component if the unit price did not exceed Rs 45 lakh. Since the last festive season, the GST rate on affordable housing has also been brought down to 1%. What makes this festive season special for buyers is the fact that a large part of the fresh and unsold ready-to-move-in stock in the country’s nine major markets are units that meet the criteria set for affordable housing. Data available with PropTiger.com show that there were over 4.71 lakh unsold affordable housing units till the end of June 2019 in India’s nine key property markets.”
Enthused by these factors, discounts offers are being launched by developers across major markets, notwithstanding the underlying sombre mood caused by an increasing number of builders joining the dubious league of financially troubled entities starting at insolvency. Unlike in the past, however, they are launching more realistic offers this year, primarily because of the monetary pressure they are reeling under. While builders in the prime markets of Mumbai and NCR are offering waivers on GST and stamp duty charges as part of their festive deals, they are also offering free gold coins, modular kitchens and electronic appliances on home purchases.
Housing.com has, for instance, kicked off its annual gala, Home Utsav, a month-long event that started on September 25. Sponsored by LIC Housing Finance, Home Utsav, 2019, would showcase a variety of property options for buyers, apart from offering them mega cash-back offers. So far, as many as 150 developers and over 1000 channel partners, with properties in India’s top eight property markets, have tied up with the portal to showcase a total of 400 projects during the event. This number is likely to increase as the event progresses. As part of the mega event, one lucky winner would get a cash prize of Rs 30 lakh upon registering for Home Utsav, 2019, and purchasing a property within a stipulated time. Another 50 lucky winners would get a cash reward of Rs 1 lakh each. As many as 15 lucky winners from Tamil Nadu would get one gold coin each, instead of the cash prize.
During Home Utsav-2018, the portal facilitated the sale of properties worth Rs 1,200 crore. This number is expected to significantly move up this year on the back of exciting offers.
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