Real estate revival: It could be a cracker of a Diwali for builders

Real Estate

Real Estate

Analysts say the modest increase in prices and record low mortgage rates of 6.5-7% should keep the sales momentum strong. (File)

Real estate developers could be in for a good festival season this year clocking in near- record sales. With a host of new launches planned between now and the end of the year builders believe business will be brisk. While the new launches were expected to commence from the second week of October, signs of interest from homebuyers have seen these being advanced.

Anjana Sastri, director (marketing), Sterling Developers, Bengaluru told FE, she was seeing many first-time home buyers who had been unable to reach a decision due to the lockdown but were now keen to conclude the deal in the festive season. “There is a healthy stock of ready- to- move- in apartments and also and near-complete inventory and that will likely be of high interest during the festive season,” Sastri observed.

Analysts say the modest increase in prices and record low mortgage rates of 6.5-7% should keep the sales momentum strong. Analysts at ICICI Securities observed that developers are being disciplined on prices with hikes of 4-5% on a like-to-like basis in new phases of ongoing projects.

Vimalendra Singh, chief sales and service officer, Mahindra Lifespace Developers, told FE that record low interest rates, relatively stable property prices, the remote working trend and added incentives in terms of schemes and discounts are all expected to contribute to the firming up of purchase decisions across segments. “We have planned launches in each of our focus markets in MMR, Pune and Bengaluru in FY22 and are also working towards a phased launch of our project ‘Luminare’ in Gurugram,” Singh said.

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Meanwhile, new projects are already attracting interest. Godrej Properties, for instance sold Rs 580 crore of inventory at Phase 2 of its Woods, Noida project on the day of the launch. Prestige Estates was able to sell over 800 plots spread over 1.7 million square feet at Rs 5,000 per square foot or a sale value of Rs 850 crore in September at its ‘The Great Acres’ project. This is part of The Prestige City project (12.8 million square feet) in Sarjapur, Bengaluru.

Brigade launched 12 new projects across 4 million square feet in August, including new phases in existing projects, across Bengaluru, Hyderabad and Chennai. The company is understood to have reported monthly sales of over Rs 400 crore each in August-September. Also, Sunteck Realty‘s Vasind launch in eastern suburbs of MMR is expected to see Rs 100 crore worth of sales bookings in Q2FY22. Mahindra Lifespaces’ recent Happinest launch in Chennai has also seen sales of over 200 units with an average ticket size of Rs 40 lakh within a month of launch.

Property consulting firm JLL released findings from a survey that covered more than 2,500 prospective homebuyers and highlighted that more than 80% of the prospective homebuyers expected to make a purchase in the next three months. This should put the residential market firmly on the recovery path.

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Samantak Das, chief economist, JLL observed that if the impending Covid-19 wave can be contained consumer sentiments would improve further with the festive season. Das expects new launches to go up in the coming months as developers monetise their land banks.

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