With residential real estate sales rallying to a 92 percent spike year-on-year last quarter, and new home registrations taking place at a rapid clip, developers are looking to capitalise on a market that is quickly consolidating its post-COVID recovery.
While homebuyers have been treated to a bevy of deals and discounts ever since the pandemic dampened buyer sentiment, developers now say a price-hike is just around the corner. At S Raheja Realty’s upcoming ‘New Light’ project in up-market Khar, in Mumbai, the developer tells CNBC-TV18 that future buyers will have to pay more for homes that are yet to be sold.
"We are already 60 percent sold in terms of inventory,” says Ram Raheja, director, S Raheja Realty, "We are on the last 40 percent of our inventory, which will definitely see a price hike as we go towards finishing."
Mumbai: registrations hit a high during Navratri
While reasons for an incoming price-hike are multifold, the most probable cause is also the obvious one: the pace of registrations, which in turn is an indication of a spurt in demand. In Mumbai, a market that longer offers the much-celebrated stamp duty rebate that it did till March 31, the registration juggernaut keeps rolling on.
The first seven days of Navaratri, October 7 to 13, saw a whopping 356 property registrations per day, according to data from Knight Frank India. During this period, the Maharashtra government made Rs 24 crore in revenues per day — three times more than it made in October last year.
While the auspiciousness of the festival may have driven pent-up registrations, experts say the festive season this year could be the best one for Indian real estate in five years. "Consumers have realized that prices have bottomed out and from here they will only see it inching upwards," says Gulam Zia, executive director, Knight Frank India.
'Best year for real estate in the last half-a-decade'
"Sentiment is building in, and there is no reason for us to believe that the festive season will not do much better than what we saw in 2019," Zia adds, “We are going to see one of the best years in the last half-a-decade."
Even in the generally muted Kolkata residential market, registrations hit a peak even before the festive season. Buoyed by a 2 percent rebate in stamp duty offered by the West Bengal government, the July-September quarter saw 15,160 registrations in Kolkata, which is a 122 percent jump year-on-year.
In fact, Kolkata and Chennai have been singled out by Knight Frank as the two property markets that have seen residential prices inch up marginally on account of the spike in demand. Given this demand, developers in Chennai are bracing for a sales boom in the next three months.
"Compared to last quarter, it (sales) will be at least 15 percent more, and compared to last year same period, it could be around 30 percent more,” says R Kumar, Chairman and MD of Chennai-based developer, Navin’s, “There is all-round positivity, and the festival season is going to add to that mood. I think decision-making will be easy and faster."
Buyers willing to spend more
Given pricing trends in the last quarter, there is some indication that buyers are also willing to shell out more for a home. Knight Frank’s numbers reveal that the share of homes priced between Rs 50 lakh and 1 crore sold between July and September grew to 35 percent of the total inventory sold last quarter from 32 percent last year. So, it comes as no surprise that developers like S Raheja Realty are building bigger homes and looking to put a premium on their price tags, especially in the mid-to-luxury segment.
Indications are that developers are looking to make the most of the sustained post-COVID recovery and make up for half-a-decade of a lull. Given that the market looks set to hit a new peak in residential sales this festive season, the consensus is that there’s no better time to marginally hike prices and make a neat profit or two.