India’s Festive Season Sparks Surge in Real Estate Sales

In Q3 of 2023, the Indian real estate market unveiled intriguing insights and trends. Despite economic challenges and the ongoing pandemic recovery, the sector demonstrated remarkable resilience, boasting a 36% annual growth that translated into the sale of over 1.20 lakh housing units across India’s top seven cities. The quarter underscored the enduring allure of homeownership, fostering a significant upswing in residential real estate activity.

The Indian real estate market hinges on two pivotal factors—market sentiment and financial considerations, both of which wield substantial influence over home-buying decisions. Even during sluggish periods, such as the COVID-19 pandemic and the Non-Banking Financial Corporation (NBFC) sector lending crisis, the real estate market has consistently found a way to thrive, as reported by Colliers India.

Festive Quarters and Housing Market

Historically, the October-December quarter, synonymous with festive celebrations, has witnessed a surge in real estate activity. Developers leverage this season to offer discounts, flexible payment options, and reduced floor rise charges. Simultaneously, financial institutions entice homebuyers with processing charge waivers and slight interest rate reductions. These strategic moves give the residential real estate market one final boost for the year.

Residential Real Estate Sales and Festive Season

Roughly 40% of annual residential unit sales in India occur during the last quarter of the year. This trend remains consistent, with 2023 housing sales projected to be 20-30% higher than 2022, thanks to the ongoing festive season.

Impact of Repo Rate Changes

While home loan EMIs do influence home-buying behavior, their effect is less pronounced among aspirational buyers. In the Indian residential segment, activity is driven more by the sense of identity and belonging associated with owning a home than by fleeting financial gains from repo rate changes. Buyers prioritize long-term financial commitments, taking into account current and expected income levels, interest rates, and other benefits over the loan’s tenor.

Immediate Liquidity Benefits

Positive sentiment played a pivotal role in the resilience of the residential segment during the peak of the COVID-19 pandemic. Several state governments offered reductions in stamp duty and registration charges, encouraging home purchases even during financially uncertain times.

Real Estate Developers’ Festive Offers

This festive season, real estate developers are unveiling new projects and a wide array of incentives, including discounts, modular kitchens, complimentary furniture, flexible payment plans, and exciting giveaways like gold coins, cars, and international trips.

Auspicious Time for Real Estate Purchases

In Indian culture, festivals hold a special place for significant purchases, including real estate investments. Buyers perceive purchases made during the festive season as promising and enduring, and developers roll out special offers to attract customers and enhance their home-buying experience.

Creating Emotional Connections

Marketers seek to forge stronger emotional bonds between buyers and properties during the festive season, underscoring the significance of the purchase decision. Offers such as cashback, foreign trips, and special discounts take center stage during this season.

The real estate sector eagerly anticipates a flourishing festive season, fostering a bullish outlook and promising growth opportunities for 2023 and beyond. As the festive spirit sweeps across the nation, the real estate market readies itself for a season of optimism, prosperity, and increased sales.