Diwali is an auspicious time to invest in new homes for homebuyers. Developers too consider it an opportune time for launching new projects. This gives homebuyers a wider range to choose from during the season.
- Low home loan rates – Commercial banks have been reducing their home loan rates to multi-year lows. Many of the banks have reduced loans irrespective of the loan amount. The low interest rates has been spurred largely by the Reserve Bank of India’s approach to keep its repo rate at 4% since May 2020. This has proved to be a big boost for homebuyers during the festive season. It will also bolster homebuyers’ confidence during Diwali 2021, which is considered an auspicious time. Multi-year low home loan rates will nudge those homebuyers who were fence-sitters and were unsure about making a purchasing decision till now. Homebuyers can benefit if they plan their home loan payment plans with their banks well.
- Developers’ offers – As we enter the festive season, developers are launching several schemes to woo homebuyers. While this is true for most festive seasons, this year we are already seeing a revival in housing sales. This is further adding to the optimism of developers this Diwali. Some schemes that we see in the market during the festive season include no EMIs till possession, 10-90% schemes, free gold coins, gifts in the form of cars, furniture, etc. In some cases, there are also assured returns on investments and other cash discounts to attract homebuyers. While these offers are not the sole basis that drives sales, they are definitely the icing on the cake for homebuyers.
- New launches – After a lull of a few quarters, new residential launches are picking up during the festive period. Developers are launching homes in the mid and high-end segments. Led by the pandemic, remote working had become the norm. Now with employers exploring hybrid ways of working, the inclination to own larger homes is high. Homebuyers are becoming more location-agnostic and exploring larger homes in suburban and peripheral locations in the big cities. They are looking for homes that will cater to the entire family’s needs. Projects from tier I developers will continue to be in demand during the festive period. Homebuyers are looking for reputed developers with a good track record of completing projects on time. Developers are also exploring plotted developments and villa projects in the high-end segment, in close proximity to big cities.
- Stable prices- Overall, residential prices have been largely stable over the last two years. This has created a conducive environment to steer demand during Diwali 2021. Moreover, led by sops from developers and lower loan rates, there is high affordability of homes. Some sectors like technology, IT, consumer-facing start-ups have been doing well, with salaries increasing in these sectors. This is allowing professionals from such industries to take the plunge to buy a home during his festive period.
- Stamp duty cuts- The government is also extending sops to homebuyers. In the last few months, the state government of Karnataka and West Bengal slashed stamp duty to boost housing sales. In July, West Bengal government has provided a stamp duty rebate of 2% on the existing 7% rate. In September 2021, Karnataka government slashed stamp duty charges to 3% on flats between Rs. 35-45 lakhs. These steps will also play an important role in steering sales in the affordable housing segment during Diwali in these states.
About the author
By Ramesh Nair, CEO | India and Managing Director, Market Development| Asia, Colliers
With a diverse experience of over 23 years, Ramesh’s career has been focused on overseeing/driving transformational change and delivering real estate solutions to domestic and multinational owners, investors and occupiers across India and South Asia. As the Chief Executive Officer (CEO), India & Managing Director, Market Development, Asia, Ramesh is responsible for the overall direction, strategy, and growth of the India’s business. His key responsibilities include driving long-term sustainable and profitable growth for the company along with developing company’s short-term and long-term strategy. He also drives business development and key relationship management across APAC to expand our client base and identify new business and opportunities to accelerate success.
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