With input costs rising, real estate developers are not offering any freebies and discounts to push sales but instead trying to tell customers that if they defer their purchasing decision, the cost of ownership may rise in the coming days. This strategy is best reflected the way the developers are pushing sales around the festival of Gudi Padwa which falls on April 2.

Developers are telling customers that this could be their last opportunity to get houses at a ‘good price’ before the property prices start to increase with stamp duty concessions as announced by some states ending on March 31, metro cess getting introduced in Maharashtra and builders looking to increase house prices to mitigate increasing costs.

Ritesh Mehta, senior director and head (West & North India), residential services told FE, “Unlike previous Gudi Padwa where developers offered discounts, this year they are creating a fear of loss in the consumers’ minds to push sales and we are seeing some impact also”.

He said that consumers are also cognisant of the fact that with Russia-Ukraine war going on import materials will remain expensive for the next 6-9 months considering the inflation rate, and therefore the fence sitters are closing purchases.

However, prices may not go up very soon as starting Gudi Padwa leading upto Akshaya Tritiya in the first week of May is an auspicious month for house purchases. If the prices go up substantially with the 1% increase in stamp duty, Metro cess, along with 15% price hike due to raw material inflation, it can slow down sales, which developers would not want to hazard. “Developers are talking about increasing rates, but it looks like it would be implemented after the festive period,” Mehta said.

Come April, a large section of developers have said they will be forced to increase prices by 10-15% as rising commodity prices of steel and cement have led to a near 30% increase in construction costs.

Pritam Chivukula, co-founder and director, Tridhaatu Realty said, “Gudi Padwa brings along some amazing deals on properties which are important for both buyers and developers. As the stamp duty rebate tenure is expected to end on March 31, I think the buyers must make the most of all before the prices of the houses in Maharashtra come back to normal or in some cases even rise”.

Farshid Cooper, managing director, Spenta Corporation said, “After the COVID-19 pandemic, this seems like a good time to make home-buying decisions as pricing is still to catch up. The added incentive this year to lock in home purchase before March 31 is the additional 1% of Metro Cess that will be charged in Maharashtra starting April 1″.

To be sure, developers have had a good run in terms of sales in the last two years despite the pandemic, and the increasing sales momentum continues. Latest Anarock Research indicates that housing sales in first quarter in 2022 are up by more than 60% as against the same period in 2021 across top seven cities. MMR (Mumbai Metropolitan Region), NCR (National Capital Region) and Pune have done particularly well with high sales momentum.

Anuj Puri, chairman, Anarock Group said, “Going by the current trends, this Gudi Padwa also seems to be a perfect blend of auspicious time and heightened consumer sentiments”.

For comparison, in 2018 housing sales trends in the first quarter – the time of Gudi Padwa recorded sales of nearly 49,790 units. In 2019, housing sales in the first quarter went up by 58%. In contrast, the first quarter sales in 2020 started to see a dip and came down to 45,200 units, demonstrating negative buyer sentiments even amidst the auspicious fervour. However, despite Covid, there has been an increase in the residential activity both in 2021 with around 58,280 units sold and 2022 first quarter, Anarock Research anticipates and over 60% yearly jump.