By: Ravi Sinha
Track2Realty Exclusive: The festivities around Navratra and Diwali are known to cheer up the sentiments of the property market. Reflection is always seen both in terms of upbeat mood of developers, as more launches are planned around this time, and the home buyers, as most of the bookings take place during this time. However, on the eve of Navratra this year, the focus is on selling more and more out of the piling inventory and hence there are comparatively less launches yet the market is flooded with tempting offer for the buyers.
The developers believe with the customized marketing for the target buyers the festivals will be the beginning of the turnaround of Mumbai real estate, which has been sluggish for some time due to macro-economic issues, ranging from overall slowdown to high interest rates. And hence, right from an offer to book and save Rs 2-12 lakh to no brokerage fees and free 100 gm gold coins with purchase of an apartment to free registration and stamp duty worth lakhs of rupees, the marketing packaging is also getting realistic.
The question is whether such festive deals are really going to change the market sentiments. Analysts believe if nothing else at least there seem to be a visible change in the sentiments, one of the key catalysts to make property purchase.Â After all, they maintain, the developers have also done their home work before flooding the market with festive offers. Dealing with inventory is a challenge that they hope to meet during the festivals.
Manju Yagnik, Vice Chairperson, Nahar Group agrees that there is a lot of inventory with the developers over the last two years which they will open up in this festive season. She suggests buyers should avail this opportunity to strike a good deal with the developer. Once the buyer has identified the property based on the amenities and infrastructure, he should do a market study of the location/area and then negotiate with the developer to get a good deal.
âThere cannot be a fixed rate for negotiation as it will depend on the demand and supply in the area. The buyers today are aware about the markets as well as their needs. Therefore, one should not just fall for flattering offers and discounts but analyze before taking a decision. Festival seasons do hold a lot of significance to the buyers. The property rates are at the lowest currently. With the rise in inflation it does not look feasible for the property rates to come down and a developer will not sell a property lower than its cost price. Therefore, the buyer should go ahead and invest in property rather than waiting for a fall in the prices,â says Yagnik.
As against the perception that there would be a few property launches this festive season, developers are nevertheless gearing up for more launches though it is much less compared to last few years. Diipesh Bhagtani, Executive Director, Jaycee Homes, says Navratra and Diwali are two big and auspicious festivals in India, that see the start of all good and important tasks and purchases. This season therefore will bring some turnaround in the market.
âYes, there are a lot of projects scheduled to be launched in the coming season. Developers have their sales strategy in place for festive season and every year inventories are consumed during this period. The sales are relatively higher during this period. These strategies are decided based on the market conditions prevailing prior to the festive season and hence fall in sync with present and future market conditions that are forecasted,â says Bhagtani.
Anshuman Magazine, CMD of CBRE South Asia, on the contrary, believes traditionally this annual festive season has been viewed as being auspicious by home buyers in India to invest in properties. The period used to coincide with yearly bonuses for the middle-income salaried class too. But with a despondent job market, rising inflation and decreasing levels of affordability, the festive period this year does not seem likely to bring in much cheer to the property market.
âSubdued demand levels have, in fact, even led to price corrections in prime residential marketsâmost markets of Delhi NCR, for example, have seen price falls in the range of around 9â12% in H1 2013. This demand stagnation is likely to continue into the festival season too, considerably dampening the likelihood of any substantial investment opportunities in the property market. A silver lining against this somber backdrop, however, seems to be an increasing interest from non-resident Indians (NRIs) in purchasing property in India to leverage the depreciating rupee,â says Magazine.
Another primary reason for choosing to buy a house around the festive time is that festival periods donât only bring attractive offers but also means choosing from a plethora of property options. Keeping in mind all the factors and also the demand-supply gap in Mumbai, it is expected that festive season would substantially increase transactions this year.
Well, the sluggish market may give indications of heading southwards on the eve of Navratra, but the realtors seem to defy the trend with their optimism. If that optimism translates into actual sales, it may lead to the recovery of the realty market which in the last couple of years has not inspired confidence, thanks to constant repo rate hike, land acquisition issues and overall crisis of confidence in collective consciousness of buyers.