The festive season is that one time of the year when sales boom, be it the automobile, consumer electronics, jewelry or real estate industry for that matter. The festivals of Diwali, Eid and Navratri are considered to be auspicious occasion to buy property. Every year, scores of buyers invest substantial sums in real estate during the season that begins in October and ends in December.
During festivals, most developers offer promising deals by cutting prices and giving buyers several benefits. This is usually done to push down stiff competition and increase sales. Banks also lure customers by offering lowered interest rates. Private sector banks as well as nationalized banks cut their interest rates substantially and at times wave off processing fees too. The ICICI Bank offered floating rate home loans at 10.25% per annum for amounts below the Rs. 30 lakh mark. The State Bank of India on the other hand offered the lowest interest rates on home loans at 9.75% per annum.
However, despite all of this, the festive season of 2012 however left developers across Indian metropolitans disappointed, particularly Mumbai. Property sales during the 2012 festive season dropped, with home registrations falling from 4,500 in September to 4,115 in October. As per the information from the Director General of Registrations, property registrations decreased by 8.5% in October. Manoj Kashyap, the regional director of real estate brokerage firm articulated, "There is an overall slowdown persisting in the market due to the absence of price revision in the markets. With hardly investors left, the end users are looking for downward revisinns in prices. But with revision not happening, it has slowed down the pace." A drop in sales could prove disastrous for real estate developers in Mumbai and other metropolitan cities in the country as well.
One of the main reasons cited for the drop in purchases is the astronomical price tags attached to property in Mumbai today. With property rates soaring higher as days go by, buying a home in desired spots in Mumbai is turning into a nightmare for the middle-class. Another reason touted as the cause for the slow-down in Mumbai property sales is the on-going wedding season. As per claims made by industry experts, the marriage season tends to cause people avoid investing their money.
Also, higher demand for homes in certain areas and comparatively lesser supply has dampened the sale of property in Mumbai. Those who've been watching the market closely have stated that a rise in supply could lead to stability in prices. This in turn could amplify property sales and give the real estate sector a lot to cheer about in the future. Apart from apartments in Mumbai, commercial spaces like shops and offices are also in high demand. Most of the newer properties however are currently under construction, and registrations made in such periods cannot be counted as actual purchases since prospective buyers haven't made a bomplete acquisition.
Developers hope the slowdown in the sector isn't permanent and this drop in sales is turned around for the better, giving the real estate industry in Mumbai an upward boost.