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How good will this Gudi Padwa be for real estate?

Saturday, March 17, 2018

A recent research stated that housing sales are likely to remain subdued this Gudi Padwa. However, some real estate experts have a differing view. Nilesh Ghadge gauges the mood

Traditionally, Gudi Padwa is hailed as one of the most auspicious occasions in Maharashtra. Gudi Padwa is celebrated on the first day of the Chaitra month, and is observed as the New Year's Day by Maharashtrians. The festival symbolises a new beginning as well as the start of the spring season. No wonder, Gudi Padwa is counted among the 3 1/2 most auspicious days in the Indian lunar calendar, whose every minute is considered auspicious. That is why it is considered to be the most favourable day for home buyers to book or enter their new houses. Even real estate developers offer lower prices under the guise of festival discounts to boost their sales on this occasion. This year, Gudi Padwa will be celebrated on March 18. However, the scenario may be a bit different this year. A latest research of ANAROCK consultant pointed out that the housing sales are likely to remain subdued during this year Gudi Padwa festival as prospective home buyers and investors are still cautious.

Course Correction
ANAROCK Chairman Anuj Puri says, "Since a large cross-section of Indians tend to link property acquisition with auspicious dates, activity levels on the property market tend to increase visibly in this period. However, Gudi Padwa 2018 is not likely to bring the accustomed uptick.”

Structural changes and policy changes such as demonetisation, RERA and GST have helped bring sanity in the Indian real estate sector. Investors, who were instrumental in driving up prices in previous years, are no longer a major factor either. However, the consultant said that Gudi Padwa 2018 arrives in the backdrop of a still-tepid housing absorption in major cities.

"This can be attributed to the fact that Indian real estate sector is still in the throes of a major course correction -- a journey that has put buyers into an extremely cautious mode, which is unlikely to relent on mere tradition-based grounds," Puri adds further.

But some experts in real estate market have a different opinion on this situation. Experts feel last year's Gudi Padwa was mired under GST and demonetisation effect, which had limited the supply side. This year, the scene is different, and developers also want buyers, hence they are going to offer discounts and freebies on Gudi Padwa.

Positive outlook
Jitendra Mehta, Vice President of MCHI Thane Unit, says “The real estate market in MMR segment has already started recovering from slowdown. This year, Gudi Padwa will definitely give a major boost to the market. If we see last two months statistics, property sale has increased.”

“With the implementations of RERA, the government has done a clean overhaul of the real estate working pattern so RERA is providing confidence to the buyer to buy a home. In Mumbai, there is still high demand for reasonably priced homes,” he adds.

This year, there is a lot of buzz in the economical housing section. Properties between the price range of Rs 30 to 40 lakh are getting more attention. Since these kind of rates are only prevalent in the outskirts of the city, places like Badlapur, Ambernath, Neral, Vangani will be a clear winner in this Gudi Padwa.

The market is just recovering right now. People are yet a bit confused with respect to both the reforms and its impact. So their buying decisions have also taken a hit. In such a case, its not feasible for any developer to launch any new properties. He would rather want to sell off his remaining properties. On a positive note, ANAROCK also said the restricted new launches and developers increasing focus on project completions would reduce unsold inventory and demand will soon begin to rise.

While the sentiment value of people is pretty high on this auspicious occasion, the clear picture is that sales and enquires don’t happen on sentiments alone. Agreed it’s a convincing factor, but it’s not the only factor, which makes it very important for the developers to cash in as hard as possible on these times and come up with variety of offers to attract the buyers.

Quick Bytes
“With the implementations of RERA, the government has done a clean overhaul of the real estate working pattern so RERA is providing confidence to the buyer to buy a home. In Mumbai, there is still high demand for reasonably priced homes.”
 - Jitendra Mehta, Vice President of MCHI Thane Unit

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