Looking to buy that dream home? You may get good deals, discounts this festive season

By: |
October 15, 2019 4:40 PM

Amidst the current market scenario, buyers can get a further discount of 15-20 per cent on the marketed price; in certain cases discounts have touched the level of 30 per cent!

festival season, festive offers, festive discounts, Diwali season, real estate, homebuyers, developers, home loan interest, NBFC crisis, discount on property price, dream home, demonetisation, economic slowdown, GST, RERADevelopers are cashing in on the festive spirit to revive sales.

The real estate market looks ripe for all prospective homebuyers, who plan to enter the market now, as hopeful of registering healthy sales during the festive season, several developers across the country are doling out discounts and freebies to offload their unsold units.

While developers are cashing in on the festive spirit to revive sales, factors such as demonetisation, economic slowdown, and introduction of GST & RERA, among others have disrupted the market in the past leading to pile up of unsold inventories. Moreover, the NBFC crisis has resulted in a liquidity squeeze and clearing the piled up unsold inventory even at a discounted price would generate cash flow and ease the liquidity crunch for the developers.

“It is expected that market will witness a significant jump in sales during the festive season that has started since the beginning of Ganesh Chaturthi celebrations and goes beyond Diwali,” said Siva Krishnan, MD – Residential Services, Developer Solutions and Strategic Consulting, JLL India.

There are some factors that Krishnan hopes would continue to drive sales across markets. Here’s a look at them:

A) Improved market situations

There has been a slump in the market since the disruption brought by measures such as demonetisation and the subsequent implementation of RERA and GST in 2017. As a result, market sentiment got affected and there was a temporary lull in activities. While developers faced challenges of huge unsold inventory, problems related to the construction finance emanated post the ILF&S crisis. With very few NBFCs remaining unaffected due to the economic challenges and high levels of non-performing stressed assets, liquidity coming from these to developers have been coming after much due diligence and caution. This resulted in further limitations.

This said, the overall scenario has made the sector more responsible towards project delivery. Development firms are focusing on their existing projects. The recent stimulus by the government in the form of a Rs 20,000 crore stress fund for the sector, and the removal of Minimum Alternate Tax (MAT) have bolstered the cause of creating more economic zones and promote affordable housing. On the other hand, implementation of RERA ensures timely completion. Overall, buyer’s interests are now protected. This has boosted consumer sentiments as evidenced in the sale of units during 2018 and first nine months of 2019.

B) Favourable interest rate scenario

Since the beginning of this year, several measures including a cumulative 135 bps policy rate cut have been announced. This will help the sector revive and grow. While banks are yet to fully transmit the rate cuts by a corresponding reduction in lending rates, this has strengthened consumer sentiment. Some large public sector banks have already announced special rate schemes to lure those buying properties during this festive season.

With developers focusing on the development of mid and affordable housing segments, buyers have plenty of options to buy from. Going forward, a surge in sales will primarily hinge on rising affordability and supply of ready projects, which in turn depends upon the effective and uniform implementation of progressive government policies and regulations such as RERA across all the states. It is expected that residential sales will improve going forward with lowering of bank lending rates.

C) Prices remain range bound

Current market trend suggests that property prices have remained range bound and have not really changed much in the past two years. As a result, prospective homebuyers have a greater chance to strike a good bargain in this market. With rock bottom residential rates, buyers have plenty of choices to buy from, both in under-construction and ready-to-move-in projects. Huge unsold inventory has forced firms to not increase their rates. With fewer launches, market is ready for homebuyers willing to take the buying decision.

What can buyers do?

While it is best to buy ready-to-move-in apartments, it is in one’s best interest to understand that this market trends. Buyers are in a position bargain hard and gain significantly. There are other factors that favour homebuyers. Falling interest rates and huge supply of affordable and mid-income housing across top cities make it a perfect time to buy a property.

Amidst the current market scenario, buyers can get a further discount of 15-20 per cent on the marketed price; in certain cases discounts have touched the level of 30 per cent!

However, if one is being offered a freebie that he already owns or one does not need, he can ask for discounts basis the MRP or the cost of the offering. If suppose, the developer has offered air conditioners in all two rooms and a hall of a two-bedroom apartment, you can always bargain on reducing another lakh from the total outgo during the deal and not take those air conditioners. But be sure to get a fix on how these freebies translate into a monetary benefit. In case the buyer is keen on buying in an under-construction project, he should look at those projects, where the developer has a good track record of completing the projects and have the wherewithal to finish the project on time.

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