Diwali : Experts-voice/expert opinion on Indian real estate

Diwali: A Game Changer for Indian Real Estate?

Diwali is only a few days away and the festive season holds hope for many realtors as well as the other major ventures of the country.

Diwali has been one of the predominant sales seasons of the yesteryears, however with the pandemic pulsating and piercing around the country's economic stability, the question of it being a game-changer is being examined by some of India's top realty experts like BS Nesar, Executive Director of Concorde Group, Ramji Subramaniam, MD of Sowparnika Projects and Manjusri MRICS, of HM Constructions.

Post Covid-19 Market Conditions

COVID-19 and the economic lockdown are some of the major paradigm shifts the world had to face since the Cold War. Nothing in the modern world has brought the whole of humanity to its knees like the pandemic. The very thought of outdoors became a threat, and the whole version of normal is now constricted to the four walls of our home!

However, the digital world thrived while the rest of the industries suffered a massive setback. Also, the pharmaceutical and door-to-door delivery business has made rapid and unprecedented gains.

Real Estate Industry was perhaps one of the hardest-hit industries in India. The urban regions suffered more, as the lockdown meant the lack of raw materials and workforce because of the mass migration of workers back to their villages.

The Needs of Home Buyers during the COVID-19 Era

The pandemic has also influenced the taste of Home Buyers to a great extent. The demand for Ready to Move In and Affordable Housing has risen substantially. The people had learned the true value of a home these days, and a large faction of current home seekers used to live in rental homes.

From being seen as a luxury and an investment to be bought off in one's later years, the appeal of "one's own home" has gained massive popularity.

Rentals thrived to date in urban circles because of the traditional thought of home as a luxury and any roof over the head would suffice for shelter. But the months spent inside rentals made them realise that it can never be counted as the real thing, after all, it's not their own.

Diwali: A New Hope?

Diwali is said to bring in a rope of fresh air to the Indian real estate. Every festive season instigates a sense of good hope, and many among our populace consider it to be an auspicious time to start something afresh. Buying properties is no different, as festive seasons saw some of the greatest transactions during these festive quarters and adjacent months. But COVID-19 and the subsequent lockdown have made the trend tread far off the usual course, however, as the cases are down now, Diwali is said to be the time when the slumbering titan of real estate wakes up. Let's read what the experts-voice expert opinions on Indian real estate have to say about these:

"There was a lull in the first quarter because of the lockdown, a lot of pent-up demand is coming back to the market," said BS Nesar, he also added that since the interest rates are at an all-time low, the attractive rates for the houses, the stamp duty reduction by state governments, the festive season will beat pre- covid numbers.

According to Manjusri of HM, the investment potential of India has grown within these months, as there's 4.8 Billion of institutional fund flow coming into the general realty and infrastructure sectors. This shows immense promise for the future.

However, according to Ramji Subramaniam, the real game-changer would be the post-Diwali sales tenure, as major cities like Bangalore with a huge migrant population would return to natives and once they get back, the sales will be boosted till Christmas and New Year season.

The Major Offers by Developers

Most of the developers are bringing in highly attractive offers this season to spark up the sales further and thus gain the advantage of momentum back to the market.

Concorde believes in providing value-added services such as providing maintenance and smart home features for another one of their projects.

Perhaps one of the most innovative offers would be from the Sowparnika Group called "SHIELD". "SHEILD" here is armour against coronavirus, it helps homebuyers to get their dream home during this pandemic. The homebuyers can pay just the initial 5 to 6 per cent of the total amount and pay nothing till possession. And the shield protects them during the possession period as well. If job loss in this uncertain time, developers would pay off the 6 months EMI. The offer will last till New Year.

HM Constructions also brings out a unique proposal titled " Be a 10, not a Tenant. Within this offer, the booking amount starts at just Rs 10,000 and the downpayment is 10% and moves in within 10 days. And for a total of 10 months, there's no EMI and a bonus rental.

Conclusion

The Real Estate sector is slowly climbing back up to its throne of glitz and glamour after a hiatus caused by the pandemic. And all fingers point to Diwali being the prince charming who shall wake her up to acclaim her glory!

This is not professional financial advice. Consulting a financial advisor about your particular circumstances is best.

Here are some experts who voice expert opinions on Indian real estate:

• Rental yields: Rental yields are low, and borrowing costs are still high.
• Property prices: Property prices increased a lot in the last market cycle (8-10 years) and the next cycle of appreciation is some time away.
• Tier 2 and Tier 3 cities: Returns in percentage terms would be much better in smaller cities than in bigger ones.
• Political interests: Political interests gave real estate a bad image.
• RERA: Once the clean-up phase of RERA is over, real estate will reflect its true place in the country's economy.
• Growth rate: India's real estate market is expected to undertake a growth rate (CAGR) of 9.2% during the five years from 2023 to 2028.
• Traditional investment instruments: With the coronavirus pandemic in the backdrop and global conflicts abound, the returns from traditional investment instruments are continuously falling.
• GDP: It is estimated that nearly 50% of India's GDP is linked with the domestic real estate sector.

Reference Links:

1. Indian Real Estate in 2023 an Overview

2. Indian Real Estate Sector to Expand into a $5 Trillion Segment

3. Top 12 Reasons to Invest in Real Estate