This Diwali, Will Real Estate See Bumper Discounts? Joyful Ambience For The Housing Industry, Examine Report

Two main forces usually interact to shape the Indian residential real estate market. Decisions to purchase a property are influenced by the state of the market and the financial implications for the purchasers. Even during times of somewhat slower activity, like the COVID-19 epidemic and the loan crisis in the NBFC sector, the housing industry has always been highlighted by auspicious purchasing seasons and holiday quarters.

According to Colliers India’s most recent evaluation of the Indian real estate market, the fourth quarter of October through December is mostly linked with the holiday promotions made by banks and financial institutions as well as developers. Financial institutions tempt purchasers with processing fee exemptions and one-time interest rate reductions by a few basis points, while developers capitalize on the holiday season by giving discounts, flexible payment choices, and a decrease in floor rise costs.

It also said that, in the end, India’s residential real estate market receives a last boost from the holiday season. However, purchasing a house is still a very personal idea, and the benefits of home ownership are immeasurable, particularly in the wake of the epidemic.

“Historically, Q4 has provided the final push to residential activity,” said Badal Yagnik, CEO of Colliers India. “Q4 is marked by higher inclination of homebuyers to wrap-up property purchases in festive period and instantaneous liquidity benefit aided by developers offering attractive discounts.” Approximately forty percent of residential units sold annually close during the last quarter of the year. According to industry estimates, house sales in 2023 will likely be 20–30% higher than in 2022 given the current holiday season and the fact that they are already approaching 2022 levels.

Buying attitude is mostly unaffected by changes in exchange rates.

Although home loan interest rates (EMIs) certainly influence end-user house purchase behavior, aspirational buyers are less affected.

The industry’s low correlation between home loan disbursements and changes in repo rates indicates that the sense of identification and belonging that comes with home ownership, rather than the transient financial gains brought about by changes in repo rates, is what drives residential segment activity in India.

Serious buyers will probably go above and beyond their means to buy properties that fit their ideal lifestyle and personality.

It’s also important to remember that purchasing a house involves a long-term financial commitment that includes current income levels, projected income growth, current interest rates, and other incentives available to purchasers.

Over the course of the house loan, a buyer typically experiences at least three business cycles, and the advantages of fluctuating interest rates eventually become more apparent.

Customers are aware that throughout the course of a lengthy house loan, variances in EMI and repo rates level off. Because interest rate patterns are cyclical, end users are less susceptible to changes in interest payments over a ten- to twenty-year timeframe. According to Vimal Nadar, senior director and head of research at Colliers India, “homebuyers are more likely to change the location, stage of construction, ticket size, unit size, preference of developer, and bouquet of amenities in the housing society than they are to rush or delay the purchase decision itself.”

Benefits from deeper and immediate liquidity inspire homebuyers.

In fact, sentiment buoyancy was crucial to the residential segment’s survival in 2020 and 2021—the peak years of the COVID-19 epidemic. To counteract the potential negative effects of the pandemic on home sales, some state governments reduced stamp duty and registration fees by up to 2%.

In fact, even during generally challenging periods characterized by financial and economic instability, purchasers bought properties, propelled by the large one-time decrease in monetary outflow. Additionally, those who were on the fence about investing felt that it was a good time to buy residential real estate, whether for their own use or as a pure investment.

In the post-COVID environment, the desire for large houses soared, the emphasis on health and wellness increased, and transaction costs significantly decreased, all of which contributed to the tremendous growth of the second-home market.

The date of property acquisitions is mostly determined by circle rates and property guideline values, which are similar to registration fees. Such regulatory changes are more common near the end of calendar or fiscal years, and an average Indian homebuyer is likely to take them into account and make advances or forego outright purchases appropriately.

The report also said that residential real estate, which has been rising all year, is expected to get a further boost from the upcoming holiday season. The hottest trends right now include brand-new releases, steep discounts, partnerships between developers and home furnishings companies, creative payment plans, and focused advertising efforts.

The exuberant mood will undoubtedly mark the end of residential real estate in 2023 and set the stage for even greater success in 2024.