The festive period is already underway and the most-awaited occasion of Diwali, also regarded as the most auspicious time for property investments, is coming soon. Yet, the market has fewer launches this time and limited festive deals/offers with lower major launches in newspapers as well. This scenario has arisen in spite of studies indicating sizable growth in Q3 2021 for new launches and residential sales figures alike. Hence, industry experts are pondering over the question- Will Diwali 2021 be positive for the realty sector?
Industry experts are of the opinion that data related to the resilience of residential realty throughout the festive period is majorly indicative of growing demand. Some feel that demand is increasing in a period where the pandemic is still there in the country. It has made housing the key aspect regarding which Indian citizens are planning their immediate and long-term lives. The festive season is always a good time to invest in real estate though there is a new type of demand this year. Many discounts and offers are usually announced when demand is seen as weaker and this is not the case in 2021. Other experts also feel that buyers are finding it safer to invest in ready to move units which are anyway limited. This may explain the lower festive offers available in the market. Several builders are still grappling with the higher costs and effort for completing projects, keeping them away from deals and other incentives this season.
Many builders are still wary of launching new inventory at a time when they already have considerable inventory in stock. Founder and COO, Square Yards, Kanika Gupta Shori, stated that sentiments are better ahead of Diwali 2021 and developers are offering under-construction and ready to move homes with several freebies, pre-payment plans and discounts. She added that developers are more confident about a better festive season with business activity picking up, the swift vaccination campaign and homeownership gaining more importance. Yet, anxieties regarding a third wave of the coronavirus may have kept developers away from new project launches since they wish to clear inventory first. This is not likely to impact realty sales throughout Diwali 2021 according to her, since there is ample supply to meet demand in this season.
The industry is already preparing for a busy season ahead with demand having surpassed supply for several real estate developers and projects. The RBI has not scaled up repo rates for a long duration and interest rates are at record lows on home loans. The property cost will however increase owing to increasing costs of raw materials while demand has gone up for larger 3 and 4 BHK homes, especially in areas like Greater Noida and Noida. Reports indicate that the top-7 cities in India have seen housing sales go up by 113% (year on year) for Q3 2021 while new launches went up by 98%, touching 62,800 and 64,560 units respectively. 10-15% housing demand increases are likely throughout the festive period till December as per experts. Some experts feel that predictions may be accurate regarding 35-40% yearly growth in housing sales figures throughout India’s top 7 cities as compared to the same duration in 2020. Q4 2020 had 50,900 units sold in these cities as per reports.
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Published Date: Oct 22, 2021
