In the good old days — before the slump — these months would spread festive cheer for developers. After all, Navratras-Dussehra-Diwali in North India, have always been a time for indulgence, a time to generously undo purse strings, an auspicious occasion to make big ticket purchases.

Typically, housing sales would spike 30 per cent, even 50 per cent, between October and December, rising from the comatose brought in by the Shradh fortnight (September). Eager home buyers would flock project sites, and after a hurried market recce, reach for their wallets to hand over booking amounts — drawn by a promise of owning a dream apartment.

FACTORS DECIDING SALES

Those days of booming sales — that began with the onset of Navratras — may well be a distant memory these days. Despite festive offers and high expectation levels of builders, a combination of factors — rising interest rates (the last one in mid-September was the 12th successive hike in 18 months), high property prices, and land acquisition issues, such as the one in Greater Noida, are weighing on buying sentiments

“Construction costs have gone through the roof, interest rates have risen, and the global macro environment is weak. It has dampened the festive season for developers… there is nothing to celebrate,” says Mr Samir Jasuja, Founder of PropEquity, a real estate data and analytics firm.

Mr Pankaj Kapoor, CEO of real estate research outfit Liases Foras, says he doesn't expect much from the festive season either, “given the gap between what consumers can afford and what is available in the market”. “If developers try to reduce this gap by offering free goodies and schemes, they can still muster some numbers,” he says.

According to Liases Foras, the unsold stock in National Capital Region (NCR) and the adjoining region, was an estimated 242 million square feet, as on June 2011. That includes inventories in Noida, Greater Noida, Gurgaon, Ghaziabad, Sonepat, Faridabad, Dharuhera, Bhiwadi and Kundli.

ROBUST DEMAND

Yet builders operating in North India insist that housing demand continues to be fairly robust, at least in pockets such as Gurgaon, and that things aren't as bad as it is being made out “by the media”. After all, the urban housing shortage is estimated at 24.7 million units, they argue. Some, however, admit that sales ‘transactions' have slumped, and despite the demand potential, buyers continue to be wary, given the general mood.

“There is real demand even today. People want good value for money, although volumes aren't phenomenal. Interest rates are, of course, a deterrent,” says Mr Getamber Anand, Managing Director of ATS Group. Raheja Developers says it is seeing more enquiries and sales. It is, in fact, launching project ‘Revanta' in Gurgaon, timing it with the ongoing festive season. “In Gurgaon, especially, we expect that the sales will be better than last year, as there have been hardly any new launches in the last six months,” says Mr Navin Raheja, CMD of Raheja Developers.

INCENTIVES AND DISCOUNTS

Already, players have started nudging fence-sitters to return to the property market, by lining up free goodies, special offers and discounts. There are special discounts and offers being promised by players such as Ansal Buildwell (for Florence Residency, Gurgaon) and Hero Group (for Holiday Homes, Haridwar). Others such as RMS Group, Today Homes, RG Group, too, have revved-up the festive chatter with all kinds of free goodies such as cars, gold, tablets PCs and durables.

Amrapali Group is dishing out a two night-three-day visit to Singapore for those booking a Sky Bungalow in its project ‘Heartbeat City' in Noida. Apart from that, the usual hubbub around the festive season is certainly down a notch or two. “Festive offers this time around, aren't as many. The construction costs, including raw material and labour costs have gone up for developers,” says Mr Anand of ATS.

MARKET PULSE

Negative headwinds notwithstanding, most builders remain eternal optimists. Mr Amit Sarin, CEO and Director at Anant Raj Industries, believes that while select pockets like Noida extension face issues such as land disputes, real estate business is “normal” in other locations such as Gurgaon and Neemrana. “So far, the signals aren't that bad. And it will improve… this season will hopefully be better,” he says.

On a similar note, Mr Raheja says his company anticipates a 20 per cent jump in transactions, compared to the same time last year. Interestingly, while most developers continue to swear by the Diwali sizzle, Parsvnath Developers is quick to shrug off such notions.

“The consumers today, particularly those in the 30-45 year age bracket, don't time big ticket purchases with any particular season. Youngsters aren't so keen regarding Shradh or Navratras, while buying a house,” quips Parsvnath Chairman, Mr Pradeep Jain.

For the property market, that is yet another sign of the changing times.

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