The residential realty segment in India has reasons to be bullish about the current festive season and beyond. The country’s residential real estate market, interplay of two fundamental factors- market sentiment and the financial impact on buyers’ pockets, has been on a high, riding on new launches, bumper discounts, innovative payment schemes and targeted marketing campaigns, which will eventually cheer realty players. Analysts firms like Colliers India feel that the ongoing festive season is likely to witness 20-30 per cent higher sales as compared to 2022. Industry consensus is indicative that 2023 housing sales are poised to be closer to the 2022 levels. While developers are likely to cash in on the festive season by offering discounts, flexible payment options and reducing floor rise charges, financial institutions would certainly entice home-buyers with processing charge waivers and one-time interest rate reductions by few basis points. One has to remember that home buying still remains an emotive concept. And interestingly, auspicious purchase periods and festive quarters have always underscored housing sector, even in periods of comparatively slower activity such as Covid-19 and NBFC sector lending crisis.
Ultimately, the festive season, provides that one last thrust to residential real estate activity in India. Typically, Q4, marked by higher inclination of homebuyers to wrap-up property purchases in festive period and instantaneous liquidity benefit aided by developers offering attractive discounts, has historically provided the final push to residential activity. Investing in real estate during this festive time transcends mere financial decision-making; it is a proactive stride towards securing one’s future while embracing the spirit of prosperity. If Colliers study is a pointer then consumers are well aware that repo rates and EMI variations even out over the long tenor of a home-loan. Interest rate trends are cyclical in nature, making end-users less sensitive to fluctuations in interest payments over a 10–20-year period. Home-buyers are more likely to alter the location, stage of construction, ticket size, unit size, preference of developer and bouquet of amenities in the housing society, rather than hasten or delay the purchase decision itself. Leading realty players, on their part, feel that the sector is poised for a notable surge in activity during the much-anticipated festive season in 2023.
Throughout the year, the residential property market has demonstrated commendable resilience, with a discernible inclination towards premium to luxury homes with modern amenities. As the festive season beckons, the realty landscape is expected to flourish due to its appealing prospects for discerning home-buyers and seasoned investors alike. Anarock’s Consumer Sentiment Survey for the first half of the year reveals a noteworthy shift whereby real estate is emerging as the preferred choice for investors, with 59 per cent of home-buyers committed to mid-range and premium homes priced between Rs. 45 lakh and Rs. 1.5 crore. And now with expectations of this festive period lasting till the year-end, a notable surge in property sales and a reduction in unsold inventories are on the horizon. The current positive sentiment is expected to lay the foundation for a stronger 2024 as well.
