Building on the strong sales performance throughout CY 2023 and the Jan-Sep 2024 period, the housing market remains well-positioned for continued growth as we approach the festive season. Traditionally, this time of the year is considered auspicious for home purchases hence the sector will witness a surge in demand from first-time homebuyers who have been hesitant.
Homebuying sentiments have stayed positive in CY 2024, with over 150,000 units sold in H1 alone, marking an increase over the same period in CY 2023. However, rising property prices and global uncertainties may prompt potential buyers to carefully consider their decisions as they weigh the current market dynamics.
The luxury housing segment, particularly in the INR 2-4 crore and above range, continues to attract interest from high-net-worth individuals (HNIs) and non-resident Indians (NRIs). This demand is driven by a desire to fetch higher return on investments amid global economic uncertainties. Moreover, an emerging segment of upper-middle-class buyers is increasingly willing to allocate larger budgets to enhance their lifestyles, indicating sustained robust activity in this space.
Festive Season Offers and Schemes
Developers are preparing an array of appealing offers aimed at prospective homebuyers. These range from EMI waivers, GST exemptions, and free registration and stamp duty to added benefits like modular kitchens, electronics, free car parking spaces, and even furnished apartments. To further attract buyers, some developers are partnering with banks to offer fixed interest rates for a set period, adding to the festive allure.
This festive season is expected to see a surge in new property launches, a trend consistent with previous years. Given the strong performance in the first half of 2024 and the sector’s propensity to peak during the festive season, we anticipate that both sales and new launches will exceed 300,000 units for the second consecutive year.
Impact of Loan Rates on Buying Sentiments
Despite higher loan rates, homeownership remains a priority for many. RBI data shows a substantial 40% increase in home loan deployment, reflecting the resilience and confidence in the housing market. Credit providers, however, need to remain cautious to manage Non-Performing Assets (NPAs) effectively.
