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.
