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Nearly two-thirds of the prospective home buyers, as many as 62%, will not buy their dream home this festive season. Expectation of a price correction, is the biggest deterrent for these home seekers this year, with as many as 38% saying that they will wait and watch the market’s movement.
Nearly as many (36%), said that they will not make a commitment, due to uncertainties in the job market, while the remaining 26% cited other issues, including economic uncertainties, affordability, stages of construction and not finding a house of one’s choice.
These are the findings of a pan-India survey by Track2Realty, a real estate think-tank, in eight real estate markets – Delhi-NCR, Mumbai, Pune, Ahmedabad, Bengaluru, Chennai, Coimbatore and Chandigarh. The primary idea was to understand how far the festive sentiment works in the housing market, amidst an overall slowdown, with macro-economic issues affecting the builders, as well as the buyers.
Key findings of the survey
- 62% Indians are unlikely to buy their dream home this festive season.
- Reasons for not buying a house: 38% of home seekers expect a price correction; 36% fear job uncertainties; 26% have other financial issues, including economic uncertainties, affordability, stages of construction and not finding a house of one’s choice.
- 78% fear that the emotional impulse of buying a house during the festive season, may land them up in the wrong project.
- 88% maintain that the availability of a ready-to-move house, pricing and amenities, are the prime criteria, when it comes to picking a house.
- 72% are not attracted to marketing offers anymore.
- 68% believe that investing in new launches during the festivals could be risky.
Should you buy a home during festivals?
The study noted that nearly two-thirds of the Indians (64%), still believe in the festive spirit and auspicious muhurats. Nevertheless, when it comes to buying a house, they would prefer to be pragmatic. Only 12% of the respondents, admitted that festive sentiments, would be the primary catalyst for buying a house in the present scenario.
“If I buy a house now and tomorrow the prices crash, then, all the auspicious sentiments will go for a toss. I do not deny the importance of muhurats but the market dynamics have to be considered, for a high value purchase like a house. It is not wise to get carried away, by the festive spirit alone,” says Gaurav Gupta, a prospective home buyer in Noida.
A majority of the home buyers (78%), are very clear that the emotional impulse of buying a house during the festive season, may land them in a wrong project.
Among first-time home buyers, as many as 26%, would prefer to make the purchase during the festivals, as against only 12% among repeat buyers. Contrary to the general perception that young buyers are not bothered about festive sentiments, the study found that there was no generation gap, as far as belief in auspicious muhurats is concerned. While 58% of buyers above the age of 50 strongly believed in it, 42% of young buyers equally believe in religious sentiments.
Nearly all the respondents (88%), listed following as the most important criteria, while picking a house:
- Availability of a ready-to-move house
Do festive offers work?
This raises the question of whether discounts and freebies no longer work in the housing market. A vast majority of home buyers, as many as 72%, said that they were not attracted to these offers anymore. A similar number of people (68%), deemed new launches during the festivals as risky.
“Any product, has to cater to the actual needs of the buyers. For long, real estate remained an exception, due to the huge demand in the market. However, the slowdown has taught the developers a few valuable lessons. Across Mumbai, developers are offering real discounts, this time around,” admits Ratnakar Shetty, a local broker.
For those who are looking to buy a house this festive season, Dhanteras emerged as the most preferred day, with 78% saying that they would book their flat on this day, followed by Navratra.
“When the market was appreciating, the home buyers were more festive-driven, as an appreciating asset is always auspicious. Nothing hurts auspiciousness more, than the fear of depreciation. I do not think the festive spirit has lost its significance. However, as property investments are not appreciating to the desirable extent, people are now looking for the right opportunity, rather than the right time,” concludes Mayank Tiwari, a financial analyst.
(The writer is CEO, Track2Realty)