Festive time is always the right time to invest as it is packed with developer offers, the lowest home loan rates, and customer-friendly payment schemes. All these bundled festivities encourage fence-sitters and first-time homebuyers to invest in their first homes. Also, from the developer's perspective, they too seek to make a good beginning with their projects and record higher sales volumes.
Mumbai real estate has recorded good sale figures in the last two quarters of the financial year 2021 with the onset of Gudi Padwa. The quarter beginning October 2021 has seen tremendous response from buyers, with the Diwali week property registrations standing at 200 plus deals per day. Moreover, the ongoing festivities and year-ending offers will attract more Indian households for homeownership amidst the pandemic, further adding good sales momentum. Also, for developers, the festive quarter is the ideal time to launch new projects, campaigns, and offers to align with the customer's needs, resulting in good sales. The year 2021 largely reflected the buoyant mood as customers looked at investing their pent up savings of the last two years in their dream home.
With the lockdown being lifted and markets resuming normal operations, we have witnessed a large faction of the customers pro-actively hunting for their desired home. This is pre-dominantly the aftermath of the COVID-19, wherein everyone realised the importance of owning a house to restrict their movement and safeguard their families.
Some of the key reasons of the real estate sector experiencing a tremendous surge in demand are-
Affordable interest rates
The current interest rate for housing loans is at a 15-year low at 6.5 percent, instilling huge confidence among first-time homebuyers. This has not only resulted in a drastic reduction in the overall cost of buying a new house but also increased the liquidity levels for banks. Also, the Reserve Bank of India's (RBIs) accommodative stance keeping the repo rate unchanged since the beginning of the pandemic has also encouraged homebuyers to become homeowners. The lowering of interest rates has given a rise in demand from the mid-segment buyer looking out for affordable and convenient homes.
Offers galore during the festive season
Real estate developers also provide an additional push to homebuyers by launching attractive offers and payment schemes to attract home buyers. Offers zero stamp duty and registration fees, buy now pay later, and subvention offers that customers value more. This is an ideal time to be a real estate customer, and the developers are fully aware of this fact. Hence, they are going all out to target maximum customers with innovative and lucrative offers.
New projects in upcoming micro-markets
Micro markets that are strategically located would also see a great influx in demand during the festive time. Projects in these micro-markets would be priced affordably as the developers would be pushing for selling out a major share of their inventory. And they offer a great discount on the overall pricing, which otherwise would not be the case. Ideally, customers would be tapping this opportunity to buy a house in a micro-market that would suit all their daily requirements. For instance, the micro-market belt in Mumbai ranging from Powai-Chandivali-Bhandup-Mulund is witnessing a surge in demand during this festive time.
Real estate as a secure asset class
Beyond the price reduction, interest reduction, and offers by developers, one of the primary reasons why real estate sales boom during the festive season is because it is a secured asset. The Indian customer also considers buying a house as an auspicious thing for their entire family to celebrate the festive season together. There is no denying the fact that it is a tangible asset that would only increase its overall value in the long term.
Conclusively, at the outset, the year 2021 has witnessed an overall growth of 15-20percent, and this momentum will only continue to grow in the forthcoming quarters. While the current quarter's numbers would be out in January 2022, it is safe to assume that the numbers would indicate a significant growth of the entire sector. The sales number in real estate will also be indicative of the recovery of the overall economy.
Ref: https://www.99acres.com/articles/real-estate-sales-surge-in-mumbai-since-the-festive-season-began.html