Attractive Prices Lure Homebuyers

E-commerce biggies may be toning down their offers, but discounts and freebies are still alive and kicking in real estate — and developers are going all out to lure buyers with attractive deals and discounts. Is it working?

As per the recent ANAROCK Consumer Sentiment survey, as many as 50% buyers across the country bought homes due to attractive prices. Hyderabad took the lead on this dynamic, with more than 61% buyers surveyed in the city confirming that lower property prices caused them to take the plunge last year.

This also coincides with the fact that at an average Rs 4,170 per sq. ft., Hyderabad's property prices are the lowest among the Top 7 Indian cities. This, despite the fact that Hyderabad also takes the 3rd spot among the top cities in average property price appreciation over the last 5 years – at nearly 15%.

Santhosh Kumar, Vice Chairman - ANAROCK Property Consultants said, “Attractive pricing, sound social and physical infrastructure development and increased office leasing activity have made Hyderabad one of the most active real estate markets in the country in recent times. Supportive government policies and political stability post state bifurcation have also changed the fortunes of the city’s real estate market over the years.”  

“If we consider sales data in the city, the top 3 micro markets with maximum housing sales between Q2 2018 – Q1 2019 were Pocharam, Bachupally and Kondapur respectively. Interestingly, the average prices in the Top 2 markets were between Rs 2,550 to 4,000 per sq. ft. Affordable markets with realistic pricing are high in demand in Hyderabad.”

Homebuyers in MMR, Pune and Bangalore cite the same reason of attractive prices for getting off the fence and making their property purchases.

However, buyers in Delhi-NCR state a different reason. Almost 50% of the buyers in NCR took the plunge in the last one year because of increased confidence on the back of RERA implementation.

“Despite the negative narrative that NCR's real estate market currently generates on account of some unscrupulous developers, more and more buyers here now repose faith in the new regulatory environment and are coming forward with purchase decision,” said Kumar. “Our survey indicates that it is not attractive prices as much as the assurance of timely delivery and even immediate possession of their homes that acts as a catalyst to the buyer’s interest. This tells the largely untold story of NCR’s realty market - that strong players with good projects are delivering and are drawing serious enquiries and sales.”

In Kolkata, which has no Central Government-linked RERA to boost confidence, 58% of the respondents stated that it was lower home loan rates that caused them to buy homes last year.

In Tier II and III cities such as Mysore, Panipat, Lucknow, Vishakhapatnam and Nagpur, RERA has also not had any ‘real’ impact on buying decisions. Instead, 27% respondents across these cities again stated lower home loan rates as their primary reason for buying homes in 2018.

The new regulatory environment post RERA implementation has caused nearly 82% NRI buyers to relinquish their previously cautious stance and invest in Indian real estate in the last one year. NRIs largely invest in under-construction properties and notably the issue of stalled or delayed projects had previously caused a majority of NRIs to shy away from property investments back home.

The author is the Vice Chairman, ANAROCK Property Consultants.