|
|
Mixed fortunes for festive realty
|
|
|
|
Top Stories |
|
|
|
|
SME Times News Bureau | 20 Oct, 2018
In the backdrop of stagnant prices, rising interest rates, improving
sales and recovering residential real estate, the current trends in the
property market during this year's festive season, marked by the onset
of Navratras, point to mixed fortunes in store for the real sector.
This
festive season is marked by fading buying sentiment of home buyers,
especially the millennials. As thousands of home buyers are struggling
to either get their homes or money back due to stalled projects,
prospective home buyers have become much more cautious. They are now
more practical in terms of the safety of their investment and are not
easily swayed by the sentiment of auspicious buying during the festive
season. Rather, they look for safe investments coupled with attractive
deals.
Of late, in the wake of the real estate slowdown, stagnant
property prices and rising development risks, investors have been
missing from the residential property market. And, with key reforms
undertaken by the government to regulate real estate, the market has
turned end-use oriented. And, as such, developers have to deal with
tough and cautious consumers who are not easily lured away.
Adversely
impacted by the absence of investors, developers in this festive season
are worried about their under-construction home inventory as buyers are
wary of touching projects which are in the development stage.
Moreover, what is further going against under-construction projects is
that deals on ready homes are more lucrative compared to
under-construction homes. Rather, buyers of ready homes are better off
with the saving of GST. As such, in the absence of better or even
matching deals, under- construction homes may not find takers in the
festive season.
This, however, has a silver lining in that sale
of ready homes has been on the rise, with an Anarock survey revealing
that 84 percent buyers want property which is ready-to-move or likely to
be living-ready in six months. And there are logical reasons for that.
Not only are buyers saved from development risk, they also save on 12
per cent GST. They also enjoy the benefit of income tax relief under
Section 80C which is applicable only to completed homes with occupation
and registration certificates. To top it all, the buyer is saved from
the double burden of EMI and house rent. Keeping this in view,
developers have been focusing on project completions and this inventory
of ready homes will come handy for developers to push sales in this
festive season.
Stagnant property prices and reasonable interest
rates may well work in favour of developers. Though the interest rates
have seen two consecutive hikes in policy rates, yet the status quo
maintained by RBI in this month's policy announcement is encouraging for
home buyers in the sense that they are still within affordable limits.
Buyers may well like to go for home buying considering that interest
rates will go up further due to economic turbulence and rising inflation
due to increasing oil prices.
Further, the substantial interest
subsidy available to buyers of affordable and mid-segment homes under
PMAY has been pushing the sale of affordable homes, with 39 per cent
buyers preferring to invest in homes priced below Rs 40 lakh. In view of
this, developers have been keeping up the momentum of building
affordable homes. As per the Anarock report, this segment saw a 65 per
cent increase in supply in Q3 2018 against the same period last year.
And, as the developers have lined up an inventory of affordable homes,
they can expect good sales of homes from this segment.
NRIs are
also turning to be big saviours for developers during this festive
season as their investments have been on the rise due to the sharp
depreciation of the rupee. According to a recent report by leading
property brokerage, 360 Realtors, NRIs in the first two quarters of this
financial year, already account for 25 per cent of overall sales.
Developers are upbeat that during festive season between October and
December, home sales to NRIs will top at least 30 per cent of the
overall sales.
One distint trend visible during this festive
season is that capital-starved developers are desperate to cut their
unsold inventory to generate money. This is especially as they are
starved of funds to complete their unfinished projects. Moreover, from
this fiscal, they have been slapped with a heavy tax on their home
inventory which is more than one year old. As such, they are out to
offer best possible deals/discounts and buyers can make most of this
opportunity during the festive season.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|