The belief that festivals are an auspicious occasion to buy real estate property drives up real estate sector each festive season. A plethora of companies target this segment with attractive offerings fuelling demand and making it an opportune moment each year. Unlike previous years, festive season in 2020 has been tepid due to shadow cast by coronavirus restrictions. The companies haven’t been able to tap into the full potential because of macro-economic factors and lack of confidence prompting delays in closure. Tier-II and Tier-III cities continue to outperform in what is a continuation of trend even before covid-19. Here are things to keep in mind:
1. Nitty gritties of offerings
With the festive season seeing an abundance of offers to choose from, it’s easy to get swayed away by
seemingly attractive discounts. Often getting down into details gives a different picture than meets the eye. A buyer should do his market research well before the festive season to accurately judge the best offers and invest in it. What goes around as huge discounts many times are just artificially highly pegged prices to make the current price seem lucrative. The monetary value of the discount, gold coin, amenities, or any other freebie needs to be arrived to compare the offers made by various developers.
2. Financing rates
Home loan rates are very low this festive season due to the RBI measures aggressively slashing rates to overcome the negative undercurrents of the economy. While short-term interest rates aren’t an important factor, there is every reason to believe that government measures will favour real estate buyers over the next few years making it an apt time to act. Apart from lending rates, loan eligibility as a criteria persists whether its festive season or not. Banks and NBFCs typically come up with festive offers and availing it along with festive offers of developers can considerably reduce costs for buyers.
3. Project launches
Taking advantage of the festive season as well as auspicious time, developers often announce new projects during the September November time frame providing yet another avenue for buyers. Prices typically offered by buyers in initial phases of projects are very attractive and festive offers will only sweeten the deal for home buyers. Buyers should, however, conduct more due diligence about the project and the company as compared to ready flats. Unlike ready apartments at higher prices, projects at the initial phase have project risk associated with it, and the possibility of the developer unable to deliver can’t be ruled out.
RERA compliance, project finance delay, economic factors local laws, unforeseen circumstances, and a number of factors comprise risks to the project. Given that number of project launches in the festive season is much more than at any point, it’s an advantage for the buyer to negotiate in a market with high supply and healthy competition.
4. Statutory payment waiver
While cash discounts, air conditioners, gold coins may be attractive, a number of developers offer waivers of statutory payments like GST or stamp duty. With a number of developers agreeing to bear the burden of statutory payments with respect to properties, a buyer can look to do away with transaction costs and greatly reduce their costs. In the backdrop of the corona crisis, a number of State governments have reduced the stamp duty to boost the economy which will encourage a higher number of real estate developers to waive these costs for buyers.
There are a number of factors ranging from cultural beliefs to economic factors that make the festive season an ideal time to buy the property. However due diligence required in the normal course of real estate transaction needs to be kept in mind in the festive season too. It’s easy to get carried away by attractive sounding offers or misleading claims or even outright lies in an unorganized market like real estate. Real estate being a long term decision shouldn’t be a hasty decision at the spur of a festive moment but a well-thought-out one. A dream home or investment should be an outcome of imagination and calculation. ‘’Home is where the heart is’’ wrote Pliny but carrying head along with heart will yield the best possible returns on investment in the real estate sector.
(Source: Financial Express)