Hope Floats for Indian Realty With Festive Bonanza - Dr Niranjan Hiranandani
Monday, November 2, 2020 10:00AM IST (4:30AM GMT)
On the path to recovery after the Tsunamis of economic, industry and taxation reforms, Indian real estate had great expectations from the year 2020. Then, the COVID-19 pandemic struck; while the series of lockdowns impacted the economy; real estate was dealt a knockout punch. Sales dipped through Q2 of the calendar year, amid buyer sentiment being affected. Q3 saw revival; ‘Mission Unlock’ coupled with positive moves by authorities saw the home buyer return.
As India enters the favored time of the year or real estate, the festive season, hope springs eternal – given that trends from past years as also the previous quarter (Q3) both suggest better days are on the anvil. It is akin to trends for both, short term and long term, favoring this year’s festive season to witness an uptick in sales for real estate.
Moving ahead from trends, if buying real estate is sentiment-driven, then there’s no better time than the festive season to see a sentiment-powered upsurge in sales. This is an annual event, powered by the association of buying property in the festive season being considered auspicious. As festive season 2020 commences, what real estate expects is the return of the end-user home buyer. This should be made up of traditional renters opting to buy their own homes having experienced the pressures of the series of lockdowns in a rented home. It should also be families opting for bigger homes in the ‘new normal’, a world where the daily commute is history and work from home (WFH) defines a world where humankind co-exists with COVID-19. Plus, NRIs making the most of the currency fluctuation to get a really good deal this festive season.
During the lockdowns, the big shift in the strategy of customer engagement by real estate developers was the extensive use of digital and online marketing and engagement tools to enhance the scale and outreach - ultimately, sales. It seems to have worked and we should see the magic happen this festive season. In the COVID-19 world, home buyers have a need for bigger and safer spaces, better amenities, verdant green and large open spaces as also having a business centre located within the project. On the other hand, flexible payment plans, festive offers and sweeteners will be the ‘demand drivers’.
The festive season will also see a positive impact from the slew of buyer-friendly measures announced by the authorities, which aim to boost home buying. This should augur well for real estate this festive season. The recent reduction in home loan rates to historic lows, as also some states slashing stamp duty rates are among the incentives for buyers to go ahead and purchase their home this festive season.
The sweeteners also have a ‘call to action’ with some of these being time bound, like the Maharashtra decision on stamp duty reduction being one such example. A segment of builders who are NAREDCO members have offered a matching scheme where a home buyer effectively, buys a home at zero stamp duty. This again is a limited period offer. With all these factors coming together this festive season, the market condition will see enhanced positivity. From the large quantum of on-going negotiations, a sizeable chunk of NRI buying is also expected to happen, during the positive sentiment driven season, bringing in more positivity to the market conditions.
Traditionally, Indians view the festive season as an auspicious time to make purchases and invest, in property, especially homes. For a home buyer, the association of the festive season is security and prosperity. This year, it should rightly translate into a home being the ideal investment, one that offers security in the COVID-19 world.