Realty misses out on festive spark

According to experts in the industry, the real estate market, reeling under a slowdown, has seen better home sales in this festive season in the run-up to Deepavali, compared to the last season. Ahead of the festive season, there were clear signs of a pick-up in residential real estate sales. 

As per Liases Foras Real Estate Ratings & Research, during the six-month period from April to October (up to Vijayadashami), home sales in India’s nine top cities have registered an increase for the first time over the last three years. The July-September purchases of new apartments by its customers increased 15-20 percent as compared to the same period last year, said a report by real estate consultancy Prop Tiger. 

Insiders shared that there have been a lot of positives this festive season. A series of real estate reforms, including the Real Estate Regulatory Act, has boosted the sentiment of home buyers. However, of late, unsold stock and delayed project deliveries have put capital rates under immense pressure. And for the last several quarters, home prices have either remained under pressure or declined. Notwithstanding the sales boost and the hopes kindled by the festive season, real estate, especially residential, continues to face many challenges. 

Many end-buyers still don’t find property prices affordable and banks failing to pass on rate cuts to consumers is another dampener. As the Real Estate Regulation Act is still months away from getting operational, buyers are apprehensive about the safety of their investments. Additionally, property buyers are concerned that returns from real estate have dropped significantly vis-a-vis other asset classes. And considering all this, one has to perhaps wait for next Deepavali to light up the home market with a proper bang.