Home sales during September-November, the period during which several festivals fall, chief of which is Diwali, did not see a major upsurge. Though the actual sales number will be known only by January, the industry estimates that it was business as usual with builders with repute and execution record managing to sell apartments.
Ashutosh Limaye, head of research, JLL India told FE that new launches from known developers, and projects that are nearing completion have seen good sales traction, beating the general perception of a slowdown in home sales.
For instance, Mumbai based real estate developer Oberoi Realty sold 68% of its project, ie 543 apartments of the 800 units launched in Oberoi Sky City in Borivali, within the first two days of its launch between October 30 and November 1, about a week before Diwali.
This, despite the fact that the company priced its offerings, starting at Rs 2.5 crore, which is considered premium for the suburb in the north-west part of Mumbai Metropolitan Region (MMR).
Similarly, Godrej Properties said it sold 300 apartments within a week of launch of its flagship project The Trees, in the eastern suburb of Vikhroli. The company launched 374 apartments on November 26, in the first phase, and says the value of apartments sold is in excess of Rs 700 crore. The pricing of apartments (average of Rs 19,000 per sq ft) is again on the higher side for the suburban market. The ticket price of the apartments is starting at Rs 1.7 crore. IDFC Securities in a recent report estimated total sales potential of around Rs 7,000 crore from the project in the next 5-6 years.
Another project launched in September, Piramal Realty’s Vaikunth in Thane, the first residential project from Ajay Piramal-led group, has seen brisk sale of apartments priced within Rs1 crore. However, bigger apartments with ticket prices going north of Rs 1.5 crore, are getting sold at a much slower pace, sources said.
Overall, Limaye said that enquiries have gone up significantly, as was visible from the response at property exhibitions held prior to Dussehra-Diwali season. “Bookings are also happening, and we expect the sale numbers to show a marginal improvement over the last year’s festive season,” he said. He refused to put numbers to the possible growth.
However, the fact that the launches, even from reputed developers have remained far and few between, and restricted to mostly MMR market, goes on to show that all is not well.
Based on data sourced from PropEquity, the number of units launched in 2015 during September-November are expected to be 30% lower on a year-on-year basis, a trend which has continued since 2013. In 2014, the blow to developers was even more severe as sales dropped 41% to 7,642 units following a steep 47% y-o-y fall in the number of homes on offer.
Builders, however, are not perturbed by continuing lackadaisical response to sales in festive season. They are hopeful that once the rate cut benefits are passed on to the customers by banks, home sales will rise. Dharmesh Jain, president of MCHI-CREDAI and proprietor Nirmal Lifestyle said that while the festive season sales were “slightly better” than last year, going forward it should be ‘good’.
Niranjan Hiranandani, managing director, Hiranandani Constructions said that he does not see buyers’ decisions getting influenced by festive season, though he termed this year’s festive sales as “good” for his own company. “It is a fact, that festive season have traditionally seen higher home sales given the auspicious tag attached to the period, but when a buyer makes a decision would think more on his ability to afford and pay for the house which he or she wants to buy. We think that will happen once home loan rates become cheaper, which should be soon”.
The broker community, however, is sceptical of any recovery in sight. Yashwant Dalal, president, Estate Agents Association of India said that prices of houses are unaffordable and out of reach for majority of people, which is keeping buyers away. He said that the festive season this year too was no different, as people continue to wait for prices to come down.