Dynamics of Indian real estate market reaches its apex during this time of the year as the nation prepares for the festive season. The season commences with Ganesh Chatruthi followed by Navratri, Durga Puja, Dussehera and reaches its peak around the festival of lights Diwali. The property market in India witnesses higher property transactions during the festive season that concludes with Christmas & New Year. Makaan.com has conducted a comprehensive research and analysis to gauge the collective expectations and offerings within the real estate industry. The analytical research covers both: the buyers and sellers side expectation and tries to identify the common points and gaps. To achieve this, the research was conducted among the home buyers and developers / builders. The research was conducted in Tier I and Tier II cities of India and saw a major participation. Home buyers’ expectations this festive season The overall mood among home buyers is upbeat with majority of them optimistic about purchasing a property during the next 100 days of festive season. 68% home buyers are also looking forward to plenty of new property launches during the festive season. The desire to finalise a property seems to be more intense this year as the buyers are looking forward to support from the developers.
The prime reason for this enthusiasm among home buyers is rooted in the expectation of schemes and freebies from the developers during the festive season. A very high percentage of respondents (almost 80) are expecting the developers to offer cash discounts of more than 5% of the home value and another 12% are looking forward to a discount in the range of 2-5%.
Similarly, out of the various freebies, the most popular and accepted option among buyers is ‘paying 20% at the time of booking and no EMI for next 12-18 months’. It seems people are unwilling to commit huge sum upfront and any freebie that helps them achieve this is bound to become the flavor of the season. The second most popular scheme among the homebuyers is “pay 40% at the time of booking and balance on possession”. Other popular schemes are free car parking and club membership with the purchase of a property.
When it comes to the budget, 75% of homebuyers are looking to invest in affordable housing (under 40 lakhs) and 21% are looking for mid segment housing (40-100 lakhs); however, a negligible number of people are looking for high end (2%) & luxury homes (2%) with budget of 100-200 lakhs and above 200 lakhs respectively. The mood among developers / builders Looking at economic condition of the country, developers are taking a conscious approach this festive season; however, they do not want to disappoint the buyers and lose out on an opportunity to revive their sales. A good number of developers are planning at launching between 1 to 5 projects during the festive season. Another 27% are more upbeat and are considering 5-10 new launches to capitalize on the festive season. The number of launches this year is likely to be lower than previous year (based on Festive Realty research by Makaan.com for 2012).
It seems the developers understand the cash situation of home buyers as most of the developers are launching projects in the affordable housing and mid-segment section. However, the number of launches in the affordable segment is 50% whereas the appetite among home buyers for this segment is 75%. This ensures good absorption of these projects. Out of the new launches 7% and 6% are likely in high end & luxury homes with budget of 100-200 lakhs and above 200 lakhs respectively. These launches are more than the current appetite among buyers.
While majority of the developers have made up their mind to offer discounts and freebies to attract home buyers, the quantum of discount varies from developer to developers. It is good news for the homebuyers that nearly 29% developers are considering to offer more than 5% cash discount. While another 21% developers are willing to offer 2-5% discounts. Moreover, according to many developers this festive season, the homebuyers can expect freebies like ‘paying 40% at the time of booking and balance on possession’ and ‘pay 20% at the time of booking and no EMI f or next 12-18 months’. This is mainly because the developers feel that the main point of attraction for the buyers will be in whichever situation they can hold onto their money now and pay later.
Source: Money Control