Unveiling ‘real’ deals in festive season 2019

The festive season has traditionally been an active period for real estate sales as many buyers consider Navaratri and Deepavali an auspicious time to buy property.
Anuj Puri, Chairman - Anarock Property Consultants
Anuj Puri, Chairman - Anarock Property Consultants

New Delhi

Like in previous years, developers this year have sweetened property deals – some up-front discounts, or more commonly 0% GST (which is in any case not charged or ready-to-move properties), waived stamp duty and registration charges, free reserved car parking, modular kitchens, etc.
However, developers are not the only entities striving to make Festive Season 2019 more… festive. To boost consumption, the government has also announced a slew of measures over the past one month which, while not necessarily benefits to homebuyers, are certainly overall industry sentiment boosters.
While these measures are not limited to the festive season, they were announced shortly before this critical period kicks in and the unspoken intention – to increase confidence and thereby nudge consumption while it is at its traditional annual high – is hard to miss.
Housing-specific signals
The government’s recent measures for the housing sector includes:
Creation of a special window of Rs 10,000 crore for last-mile funding of distressed affordable and mid segment homes. Approximately the same amount of funds will be added by outside investors such as LIC, etc.
In another positive and a bold step to help revive the economy, government slashed the corporate tax rates to 25.17% (inclusive of cess and surcharge) from earlier 30%. This could have a ripple impact on all sectors, including real estate, as it will encourage foreign institutional investors.
To increase liquidity, an additional Rs 20,000 crore will be given to HFCs by the NHB, taking the total to Rs 30,000 crore.
Further, the reduction in interest rates when banks link them to the repo rates may also be an incentive for buyers to consider home purchase
in the future.
Collectively, the top 7 cities saw housing rise by 51% in Q4 2018 against the corresponding quarter in 2017. Sales in the festive quarter of 2018 were 69,860 units. In Chennai, residential sales saw yearly jump of 26% - from 2,600 units in Q4 2017 to 3,290 units a year later. Chennai saw average prices rise by merely 3% during the period to INR 4,930 per sq. ft.
Macro-consumption signals
The economy and residential real estate are closely interlinked, but the commercial real estate sector is an even more efficient. The job creation aspect of office space absorption is inescapable, but another segment of commercial real estate – retail – is literally a finger on the pulse of consumption sentiment.
To this end, the government has relaxed the FDI norms in single-brand retail and expanded 30% of domestic sourcing norms. Also, single brand retailers can now launch their e-store before establishing brick and mortar operations (though they will still need to build their physical store within two years of e-store launch).
In short - access to more global brands through online even before their physical launch and the eventual consumption of retail space coupled with jobs created when stores are in operation – are definite consumption triggers.
With various government interventions and proactive deal-sweetening by developers, the stage is set for the last quarter of 2019 to witness increased housing sales. Realistically, we can look forward to a minimum housing sales increase between 5-7 per cent in the upcoming Q4 2019 – which is still far below the increase of 20-25 per cent witnessed during the boom years.

Visit news.dtnext.in to explore our interactive epaper!

Download the DT Next app for more exciting features!

Click here for iOS

Click here for Android

Related Stories

No stories found.
DT next
www.dtnext.in