The festive season is round the corner. Just as segments like retail and FMCG, the real estate sector will also throw open several festive offers to lure homebuyers. The sector has remained under the wraps for some time now (owing to RERA and demonetisation) with subdued offtake and piled up inventories. Needless to say, that builders are now focussing on offloading at least a certain percentage of their inventory this festive season.
However, if you are looking towards investing in a property this festive season, is it a good idea?
“While real estate investment as an asset class might not be a great idea, straight up discounts on prices can be beneficial for buyers this festive season. In other cases, waiver of certain charges or certain freebies help keep the overall cost incidence within the buyer budget. However, buyers should not get swayed only by such packages and offers, and undertake a thorough due diligence on the project and the promoter,” says Anshul Jain, Country Head and Managing Director, Cushman & Wakefield, India.
As far as new projects are concerned, some prominent developers may choose to do so during this period, feels Jain.
“But launches are more time-bound due to RERA approval being received and may not be directly a result of the upcoming festive season; barring the fact that buyer enquiries are typically on the rise and bound to go even higher during this period with the conversion rates also expected to improve” he confirms.
Jain also adds that a large part of the focus shall obviously remain on clearing existing inventory; but efforts are on much before with developers undertaking home fests and broker meets to push for higher incentives for buyers through limited period discounts on prices, freebies (modular kitchens, air-conditioners, refrigerators), waiver of GST or club membership or car parking charges or maintenance charges waiver for first year or all-inclusive pricing with freebies thrown in as well.
Demand in the real estate sector has been lukewarm owing to two major events in the recent past – the Real Estate Act or RERA of 2016 and government’s demonetosation measure later that year.
However, Sunil Mishra, COO, IL&FS Township & Urban Assets Limited feels that home buying is expected to shoot up by 30 per cent this festive season. Needless to say, homebuyers can look towards buying properties during this time with some positive returns in the next two to three years.
Assessing the market from a more holistic perspective, Mishra points out four factors that have been a driving force behind the real estate market. These include the RERA, GST and of course the still continuing impact of demonetisation, rise in GDP, stagnant market prices and a falling rupee. “While resident Indians might feel a slight heat of directly investing in the realty markets right now, for NRIs it can be a good time,” says Mishra.
However, experts are also of the opinion that, homebuyers should exercise caution before taking a final decision. They should go for developers registered with the RERA with good track record, choose the best possible home loan (with the best interest rates) and then finalise their dream home.