The real estate sector witnessing weak demand and burdened with oversupply in various pockets across the country looked up to the festive season this year to bring back some cheer. Dussehra and Diwali are behind us,and initial reports suggest that the season did not turn out as expected.
While the industry tried hard to get the attention of potential buyers by offering price discounts in some areas and also giving freebies to spur purchase decisions,buyers largely remained unimpressed and sales did not take-off. Not only did the festive season fail to bring a turnaround,there are some who are saying that it may have been the worst festive season in almost a decade.
That throws up an important question: what can potential home buyers and real estate investors expect from developers? A majority of them are are sitting on inventory that is only growing and are facing problems of even funding their working capital requirements.
Discussions with industry players and experts reveal that in the coming 6-8 months little is expected to move on account of the upcoming General Elections around May 2014 and the ongoing weakness in overall consumer sentiments. And with real estate industry witnessing an oversupply situation in various pockets,it may turn out to be an interesting phase for home buyers and there is every possibility of getting a good deal on that dream home.
It was a festive season that failed to cheer developers,brokers and other stakeholders within the sector. Industry experts and developers say that sales during the festive season were roughly around 40 per cent of what the industry had expected and that is nothing less than a disaster for the industry.
Even as developers looked to dispose of their existing inventory,several new projects also got launched across various markets to tap home buyers sitting on the fence,but that did not prove to be of any help either.
Interestingly,as the festive season approached,roads leading to Noida,Noida Extention,Indirapuram (Ghaziabad) and Greater Noida saw huge hoardings of cricketers (from Virender Sehwag to Munaf Patel) and Bollywood celebrities (Shahrukh Khan,Kareena Kapoor and Anil Kapoor) endorsing real estate projects. That star power could do little to uplift sentiments.
It has been an extremely bad festive season in a long time may be it is the worst after the one witnessed in 2004-05. In that sense there has been no festive season for the real estate industry, said Gulam Zia,national director research and advisory services at Knight Frank India.
Even a good amount of discounts that were on offer failed to attract home buyers. This festive season saw a lukewarm response from home buyers,despite the usual sales discounts and freebies. Property prices have stabilised and come down by about 10-15 per cent in certain markets of Delhi NCR and Mumbai but home buyers continued to prefer a wait-and-watch approach in these inflationary times, said Anshuman Magazine,chairman & MD,CBRE South Asia.
Even the developer community accepts the fact. The market has not responded as per expectations and sentiments were low, said Tarandeep,GM-Marketing at Paras Buildtech.