Looks like the affordable housing segment has hit the home run! Homebuyers are out in droves through the festive season, unperturbed by the challenges of 2020 and property sales figures have reached 80% of pre-Covid levels. If these aren’t good tidings for the real estate sector, nothing else can be.
The property sector is trying its best to negate the crisis and bring in the good times again, albeit with some handholding from the government. The pandemic induced lockdown had rattled the foundations of the real estate sector and conjured up an apocalyptic situation which saw homebuyers shelve their homebuying plans and property sales drop to a record 80%.
A massive collapse was imminent for the real estate sector, but the timely financial stimulus, loan moratoriums, stamp duty cuts, income tax cuts, reduced interest rates and extension of project deadlines lessened the pain and put it on a path of recovery.
Realtors fashion strategies to win homebuyers
Homebuying is an emotional and high-capital investment that involves a lifetime of savings. The uncertain atmosphere brought upon by the pandemic with job losses, spike in unemployment, and a tanking economy, usurped the confidence of homebuyers and pushed them away from their homebuying ambitions.
It was a task for realtors to create a positive sentiment in homebuyers and win their confidence. The lockdown created an urgent need for homes as homebuyers were pooped out staying locked in for months. This was a beacon of positivity for realtors as they swung into action with stunning payment plans, GST waivers, payment deferrals, full refund on cancellation, lower booking amount and other sops to rein in homebuyers.
While most real estate developers registered healthy real estate sales, it is the festive season which brought much cheer to the real estate sector as residential homes got sold in record numbers.
Property prices slashed to offload inventory
The desperation of realtors to increase cash flow and liquidate their inventory is reflected in the dramatic reduction in property prices across tier 1 cities. Real estate consultants reiterate that developers are taking the ongoing festive season as an opportunity to offload as much inventory as possible and fill their coffers with as much cash as possible to ward off RERA fines, consumer hassles and bankruptcy issues.
In cities like MMR, developers have slashed property prices by up to 20% for projects that were launched 1-2 years ago but haven’t got any takers. Since home inventory levels surged due to the nationwide lockdown, realtors are wooing homebuyers with deals to end the year on a high.
The recent stamp duty cut has sparked a homebuying spree, converting even fence-sitters into buyers, and realtors want to make the most of this updated trend.
Homes become more affordable
Home sales in the month of October have seen a sharp rise with many tier 1 cities registering more than expected home sales. Homes sold in Mumbai and the whole of Maharashtra are 10-30% higher in October, compared with January 2020.
Favourable interest rates, cut in stamp duty and fall in property prices made homes 35% more affordable in top 10 cities. Cities like Mumbai, NCR, Pune, Bengaluru and Hyderabad became more affordable owing to the above-mentioned factors. Most realty companies showed better growth in Q3 and rebound in real estate was faster in October than expected.
With the homebuying palette full of buyer-centric goodies, the real estate sector is witnessing a surge in affordable home buying, something that is expected to continue till next year.
