Dhanteras and Deepavali are festivals that see hefty spending in gold or land. Every year, retailers, traders, banks and developers devise exciting marketing schemes to maximise buyer interest and leverage on sales. While consumer demand may soar 40 per cent for consumer durables, jewellery, automobiles, etc., property sales, however, is anticipated at 10 per cent this year across India. Price correction and policy uncertainties are the biggest deterrents to sale of property this festive season.
NGT (National Green Tribunal)and TDR (Transfer of Development Rights) have already impacted property investments in southern cities. Meanwhile, high price points and inventory pile-up have resulted in a subsequent dip in the residential demand across key urban areassince June 2015. Bengaluru and Hyderabad markets are expected to capitalise on the existing real estate demand this festive season owing to stable property prices. This year, price discount in the range of Rs. 100-200 per sq. ft is expected across the residential market. A gradual price hike in select micro-locations will only be observed by the first quarter of 2017.
Pro-buyer Real Estate Regulation Act (RERA) undoubtedly safeguards buyer’s interest and encourages transparent property dealings, but the real game-changer would be attractive price points. The RBI rate cut is the best festive gift to property buyers and the real estate community. If the central bank effects immediate reduction in its lending rates, a pronounced effect will be visible in real estate sales. Reduction in interest rates significantly impacts the affordability of retail consumers. The implications of GST also will largely depend on the fixation of the taxation rate.
The cautious buyer today is no more taken in by developer incentives like 20:80 schemes, free gold coins on purchase, free car parking, two-wheelers or modular kitchen set-ups. Instead, pragmatic purchase decisions are based on tax benefits and project specifications and not limited to auspicious calendar dates and vaastu.