Dussehra brings slight relief to ailing real estate market in Mumbai

October 12, 2016 Hindustan Times By LODHA

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Dussehra, an auspicious day for homebuyers to book apartments, gave hopes to builders who have seen a slowdown for the last few years.

The sales, although not very significant, have encouraged the realty estate market.

Builders’ announcement of sops and incentives such as discounts, freebies such as vehicles, gold coins and waiver in government taxes such as stamp duty and registration fees worked.

According to builders and realty experts, homebuyers are slowly taking a plunge, showing an interest in projects located on the outskirts of Mumbai.

Tejas Vyas, director of Oyster Group, said they got a a good response. “We recorded good sales for Dahisar and‎ Kandivli projects,” said Vyas, who also heads the Maharashtra Chambers of Housing Industry exhibition committee.

According to Jones Lang LaSalle (JLL) India, the fall in interest rates on home loans and the festive season offers have played a positive role in lifting the market. “With the added impetus provided by the festive season after a prolonged lull, homebuyers in Mumbai are back to a certain but definitely not spectacular extent,” said Ramesh Nair, COO (Operations & International Director), JLL India.

Paras Gundecha, chairman and managing director of Gundecha Group, said the market is slowly picking up. “We are seeing enquiries as well as people buying properties,” said Gundecha. “The taxes and premiums have taken a toll on us and constrained our ability to reduce the prices.”

Dussehra, Gudi Padwa, Akshay Tritiya and Diwali are auspicious occasions for homebuyers and the festivals used to see the highest number of projects being launched. But with recession hitting the sector, the number of launches as well as sales has dipped significantly in the last few years.

The last few years have witnessed a slowdown in the realty sector as builders jacked up prices after banks imposed stringent conditions on home loans.

Problems facing the Real Estate Sector

1)Prices continue to remain exorbitantly high.

2)The sentiments of the Homebuyers are that the prices will drop eventually.

3)Though the Reserve Bank of India (RBI) has reduced Interest rates on home loans, they still continue to remain high.

4)It takes years to get approvals which increases the cost of the project substantially.

5)Institutional financing is a big problem and hence builders are dependent on private moneylenders which charge high interest rates thus making projects costlier.