India's Festive Housing Boom: A New Era for Real Estate

The festive season in India is set to boost the housing market, building on strong sales from 2023 and 2024. Attractive offers and new property launches promise to drive further growth despite high loan rates and economic challenges.

As the festive season dawns, India's housing market is gearing up for a surge in demand, fueled by robust sales seen in the previous year and the first nine months of 2024, as reported by CBRE. Traditionally, this period is considered auspicious for purchasing homes, enticing first-time buyers who had previously held back, thereby contributing to the sector's expansion prospects.

The prevailing positive sentiment towards homebuying has continued throughout 2024, with sales exceeding 150,000 units during the first half of the year, marking an increase from the same timeframe in 2023. However, prospective buyers remain cautious, navigating through rising property prices and global economic uncertainties while critically assessing current market dynamics before making purchase decisions.

The demand in the luxury housing segment remains robust, particularly in the Rs 2-4 crore and above category. High-net-worth individuals (HNIs) and non-resident Indians (NRIs) are pivotal in this trend, attracted by the potential for lucrative investment returns amidst a turbulent global economy.

There is also a growing interest from upper-middle-class buyers, keen on allocating larger budgets for enhancing their living standards, indicative of ongoing activity in the luxury market. Developers are jumping on this opportunity by offering enticing deals to attract potential homebuyers.

Incentives such as EMI waivers, GST exemptions, complimentary registration and stamp duty, along with extra benefits including modular kitchens, electronics, free parking, and even fully furnished apartments, are being offered. Some developers have partnered with banks to introduce fixed-interest rate schemes for a specified period, enhancing the festive charm while alleviating concerns over escalating loan costs. New property launches are anticipated to rise, mirroring past trends. Given the housing market's robust performance in early 2024, the festive season could propel total sales and new launches past the 300,000-unit threshold for the second year running.

Even though elevated loan rates pose challenges, the aspiration for homeownership remains strong among many buyers. Data from the Reserve Bank of India (RBI) indicates a 40% surge in home loan deployment, underscoring confidence and resilience in the housing sector. However, credit institutions must proceed cautiously to manage Non-Performing Assets (NPAs) and maintain market stability.

(With inputs from agencies.)