Dark Diwali For Real Estate Sector As Festive Season Fails To Attract Home Buyers

Marred by high cost of input and gloomy consumer sentiment in the real estate sector, it was a dull Diwali for the industry players in the property market. According to a study by industry body ASSOCHAM, there has been 30% increase in the launch of new residential projects every quarter this year, which has resulted in the inventory further going up by 6.7% in the same period.

Diwali is regarded as the most crucial time for the industry with sales increasing by 20-25% as compared to normal days. But this year, it has not brought much cheer to the real estate industry.

According to Anuj Puri, chairman and India head of Jones Lang LaSalle, a global real estate services firm, the Narendra Modi-led government’s pro-business policies will need more time to yield the desired results.

“While demand exists, it is still held in abeyance by various economic factors, including the natural lag between the announcement and implementation of the government policy catalysts,” he said. “It will take several more months for the market to get into convincing forward momentum again. The festive season did not bring the kind of momentum that was hoped for,” he added.

To counter the slump in sales, developers have been offering some discounts and incentives. But even these steps have failed to attract buyers. "While there was an improvement in new launches, sales continued to remain low despite developers offering attractive pricing schemes and discounts to attract buyers," stated a study done by Jones Lang LaSalle.

“During the festive season, developers generally launch new projects as well as offer various incentives to attract buyers. However, over the last few quarters, there has been a slowdown in new launches as the inventory levels itself are very high,” Samruddhi Realty Chief Executive Madhusudan K said.