The real estate market typically enjoys a surge during the festive season, a trend that held true over the past years. However, this year, the dynamics have shifted dramatically, presenting challenges for the market.
Festival Season Unsuccessful in Boosting Sales
The anticipated lift from the festive season did not materialize, and sales of residential properties saw a notable decline. Traditionally, this season is a prime time for homeownership, yet this year it fell short of expectations.
Sales figures for residential units have remained stagnant and, frankly, unremarkable, seemingly incapable of reviving the sluggish real estate market despite the festive spirit. Various factors seem to contribute to this downturn—higher pricing and increased interest rates have emerged as significant barriers, creating an environment of non-affordability that discourages prospective buyers.
Recent statistics indicate an alarming 8.5% reduction in residential property sales in October compared to the previous month. Sales plummeted from 4,500 to 4,115 units despite several auspicious occasions like Diwali, Navratri, and Eid, which typically encourage purchases.
The drop seen in August was initially interpreted as an impending festive season boost, but the presence of festive offers and incentives failed to attract buyer interest.
According to Mr. Paras Gundecha, Chief of the Housing Industry Chambers’ Maharashtra (MCHI), the anticipated influx of new buyers during the festival season has not occurred, adversely impacting the market. He noted the usual excitement and increased activity in the real estate sector during festive times have been visibly absent this year.
The combination of escalating land costs and rising interest rates has rendered property investments unaffordable for many, leading to a reluctance among homebuyers. Additionally, the change in the marriage season appears to further deter potential investors, who often prefer to undertake investments in their leisure time.
It’s worth noting, however, that while the market grapples with falling sales, property prices have stabilized due to a bountiful supply. Analysts in the real estate sector suggest that homebuyers may still benefit from upcoming incentives and discounts offered by builders as a way to entice their interest.