It’s that time of the year when the entire country gears up for the festive season that kicks off with Ganesh Chaturthi and hits a peak with Diwali. Apart from the festivity and shopping splurges that are indulged in during such a time, investment also plays a key role, especially in terms of metals (gold, silver, platinum) and real estate. However, it is the latter that has been gaining ground over the years, as properties are seen as a stronger and more consistent investment medium than traditional alternatives like metal, which are often impacted by the volatility in the market.
Since festivals often stand for new beginnings and prosperity, buying properties around this time is seen as an investment that can never go wrong. A belief that was validated during the festival season in 2021, when the real estate sector, which had taken a major hit during the onset of the COVID-19 pandemic and lockdown, bounced back with a reprisal between July to September.
Property consultancy Knight Frank India, in fact, reported that the volume of housing sales across the eight major cities went up by 92% between July to September. A survey by YouGov, a global market research company, during Diwali last year also found that around 51% of urban Indians believed that the best time to invest in real estate is during the festival season.
The scenario for this festive season, however, seems a tad different for the real estate sector, despite bouncing back with vigour since 2020. The volatility emerging from various socio-economic factors, which include the pandemic, disrupted global supply chain, repeated repo rate hikes, and inflation, among others, has triggered speculation about whether the sales in the home market will be able to reach pre-COVID levels.
Demand for homes on a roll
The Housing Price Tracker Report 2022, released by The Confederation of Real Estate Developers Association of India (CREDAI), Real Estate Consultant Colliers India, and Liases Foras, states that there has been a surge in residential demand in eight cities, which include Mumbai Metropolitan Region (MMR), Delhi-NCR, Chennai, Kolkata, Bengaluru, Hyderabad, Pune, and Ahmedabad. The report also states that the demand has led to a 5% increase in prices and a marginal decline in unsold inventory during the April-June quarter. It also predicts that the demand for residential properties as well as price rates will continue to grow further in the next eight months.
Real estate market watchers believe that there is a strong positive buyer sentiment that refuses to be discouraged by price hikes or increases in home loan rates. A case in point is Pune. The Housing Price Tracker Report 2022 reports a drop in its unsold inventory in the region, unlike Mumbai, because there is a genuine demand for homes there. This robust demand for homes is expected to continue during the festive months and beyond.
Factors and Trends
What is propelling this demand for homes among Indian buyers despite the challenges ahead? Buying properties during the festive season is mostly driven by three reasons: a) It is seen as an auspicious time to invest in something valuable; b) It is also a time when new building projects are launched; c) Real estate developers are known to roll out interesting offers and schemes to attract buyers to their projects. But the biggest factor driving people to buy homes today is their experience during the COVID-19 pandemic and lockdown. It has made people rethink their priorities, and thus owning a home has gained importance as it spells comfort and security.
The pandemic has triggered a series of trends in the real estate sector, some of which include the following:
- With hybrid work culture now the norm, companies are now seeking grade-A offices and flexible workspaces
- With a work-from-home culture seeping in, buyers want homes that are large and spacious
- Distance is no longer an issue in the new work scenario, and so if a homebuyer finds his/her dream home in the distant suburbs or beyond, he/she will still shell out the money for it
- Millennials want homes that are not only eco-friendly but also provide a high level of automation and Internet of Things (IoT) technology
With so much driving people to invest, the real estate sector has a lot to rejoice about during this festive season!
