Festive season does not bring much cheer
With the realty market in recovery mode, sales velocity remained uninspiring during Navratra and Diwali
Li ke always, during D i w a l i t h i s ye a r, several developers announced f estive offers to lure homebuyers, offering possession of units and innovative financial schemes, among other things. Though there was interest among buyers, not many of them bought residential properties. They preferred to wait to reap the benefits of a likely market recovery because of the new government at the Centre and the tax sops announced in the Budget. Surprisingly, it was the secondary market that did fairly well this season and that was primarily because ready- tomove-in products were available “off the shelf ” at a “comfortable” price for buyers. “Sales velocity during this festive season remained uninspiring despite the various attractive pricing schemes and discounts that developers have been offering to attract buyers. However, the current scenario is in no way indicative of what lies ahead for the real estate market, for which the outlook remains very positive. To my reckoning, we are currently at the cusp of growth, and the tangible manifestations of the current market recovery will become visible over the next 12 months. The old dictum ‘what cooks slowly, cooks well’ is very pertinent in the present scenario,” says Anuj Puri, chairman and country head, JLL India.
The benefits of a recovering market could not be harnessed during the festive season. The events that catalysed the recovery – namely the new government at the centre, its pro- business policies, t he encouraging Union Budget and its provisions favouring real estate, are likely to take more time to impact the market. Likewise, the RBI held on to current interest rates as safeguard against further inflationary trends. It will take several more months for t he market t o g ai n c onvincing momentum again, so the festive season did not bring the kind of momentum that was hoped for, Puri adds.
Vineet Relia, managing director, Sare Homes, says, “Post 2011, offers during festive season don’t work. Customers buy houses when they get a good deal. Interestingly, we get more enquiries during shradh (a period of mourning when transactions are considered inauspicious). Many customers leave behind post dated cheques with a Navratra date. Freebies do not help shore up sales. A free trip to a foreign country on booking is no longer a decision maker or a trigger to close a deal. Only an affordable price and a good location is.”
There has been no significant improvement in sales this season. Interestingly, the resale market is taking off in a big way and has seen an improvement of about 10%. “Overall activity in this segment has increased as fence sitters are taking fast decisions. This being a ready- to- move product, there is more traction in this segment this season,” says Shveta Jain, executive director, residential, Cushman & Wakefield India.
There have also not been too many new launches. With reference to the high levels of unsold inventory, launches have decreased consistently since the first quarter of 2013, with the exception of the first quarter this year, in which launches increased.