BackRealty firms bet on festive season to revive sales
Property advisers expect sales in the festival season that runs from September to the end of December to rise as much 50% from a year ago
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Mumbai: Property developers are rolling out various offers and schemes in the ongoing festival season to recoup sales disrupted by demonetisation, the real estate legislation, and a new indirect tax regime.
Property advisers and experts expect sales during the festival season that runs from September to the end of December to rise as much 50% from a year ago.
“This festive season is an opportune time and builders want to cash in for their own self revival. Normally, during the festive season, there is a growth of 15-20% over the previous quarter. But this time, there will be a much larger growth. The market is coming out from the bottoms and we are seeing a big amount of intervention," said Pankaj Kapoor, managing director, Liases Foras, a property advisory firm. Greater consumer confidence thanks to the Real Estate (Regulation and Development) Act and various freebies and schemes could bump up sales by 40-50%, Kapoor said. According to real estate research firm PropEquity, in the October-December period last year, homes sales were down by up to 38% across four major cities—Delhi-National Capital Region (NCR), Mumbai, Bengaluru and Pune—as demonetization severely impacted the sector.
Several large builders across the country including Tata Housing Development Co. Ltd, Puravankara Ltd, Keystone Realtors Pvt. Ltd, which builds residential projects under Rustomjee brand and Kolte Patil Developers Ltd are offering subvention schemes, discounts and freebies especially for ready-to-move-in apartments and affordable housing.
Pune-based Kolte Patil expects a sales jump of up to 30% from the previous year, thanks to overall improvement in confidence after the implementation of RERA. “During the festive season, most developers typically take 2-4% hit in their margins by giving away freebies and offers, but they expect a incremental velocity on the back of it. Besides, developers would be rolling out offers and discounts to make up for the lost quarters this year and also in need of cash flow," Gopal Sarda, group chief executive officer, Kolte Patil Developers said.
“This festive season is important for the developers as it is the first festive season after the implementation of RERA... We anticipate that it will lend a positive outlook to home buyers, encouraging them to explore an impending purchase or investment," said Rajeeb Dash, head (corporate marketing) Tata Housing. The company is offering a 20:80 scheme, in which customers can pay 20% of the total cost upfront and move in to the new home while the rest can be paid after two years.
According to Surendra Hiranandani, chairman and managing director, House of Hiranandani, RERA and goods and service tax (GST) would boost sales for ready-to-move-in apartments during the festive season.
“The influx of liquidity in the system has ensured attractive home loan rates which combined with the positive effect of GST on ready-to-move homes will hopefully turn fence-sitters into buyers," he said.
Bengaluru-based Puravankara had conducted a ‘Big 72 hrs Online Home Fest’ during 15-17 September in Bengaluru, Chennai and Dubai, where buyers could purchase refundable vouchers online by paying Rs720 and block special prices for an entire month for its Puravankara and Provident.
“Over the last decade or so, there has been a growing reduction in sales spikes during festival season, with a more even spread-out of sales throughout the year. Having said that, the importance of buoyant consumer sentiment during this season makes all of us stay optimistic, especially now as the post RERA and GST rush has largely stabilised," said Ashish R. Puravankara, managing director at Puravankara.
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