It’s interesting to note the steep learning curve on the Indian real estate market. Property buyers have become a lot savvier these days, especially after the recent slowdown. For instance, the festival season (from mid-September to the end of November) usually drives up property purchases – especially on the residential front.
While a fortnight of ‘Pitru- Paksha‘ or ‘Shradh- Paksha‘ just after the Hindu month of Shravan is taken as a period for abstinence from new purchases, every other period during the monsoon is considered auspicious.
However, I think it’s a fairly safe bet that we are not going to see any exuberant tradition-fuelled spiking of transactions this year. Of course, property purchases had risen over the last two quarters, but this rise was fuelled by improved sentiments that came after the economic revival and stability.
While the festival season is likely to bring a certain degree of temporary effervescence in residential sales, one cannot read too much into this in market terms. We are certainly seeing a significant return of interest in home buying this year, but a sustainable revival depends on a number of macro factors.
Actually, home buyers are a lot more circumspect this year. In the primary cities, one can see a marked degree of fence-sitting in anticipation of a correction. As of now, the demand for right-priced homes in affordable locations remains steady, but there is also a noticeable slowdown in demand for overpriced areas and projects.
The usual add-on incentives that developers usually offer during this period will not be much in evidence. They are aware that their customers are focused on true value, and that it is location, pricing and appreciation potential that are now the primary criteria for Indian residential property buyers.
Obviously, festival-oriented promotional activity will happen as always – but unrelated freebies will be at a minimum. Given the market dynamics now, I would say that there will be a greater emphasis on friendlier financial structuring and actual rate discounts instead.
Ashutosh Limaye, Head – Real Estate Intelligence Service, Jones Lang LaSalle India