October to December 15 is the peak sales season for real estate developers, after which sales decline. The other period for brisk business is in summer.
This festive season, Godrej Properties has launched two projects in Mumbai — in Kalyan and Kandivali — and one each in Pune and South Delhi.
“We see a big opportunity in the slowdown to scale up our business. We are adding new projects and entering new micro-markets to deepen our presence and increase our market share in four key growth regions (Mumbai, Pune, Bengaluru and NCR) identified by us,” said Pirojsha Godrej, Chairman, Godrej Properties. He said the company has seen a good uptake in its recent launches and hopes to continue to build on the momentum in Q3 and Q4.
Other real estate firms are also unveiling new projects. Oberoi Realty is launching phase three of its Goregaon project in Mumbai and Thane project in Q3 of FY20. Company sources said that it got a good response to its recently-launched residential tower on the Jogeshwari-Vikhroli Link Road in Mumbai.
“We don’t think the markets are down for developers who have a strong balance sheet and a good track record. In fact, this is the right time to get aggressive since we have access to the best talent, resources and customers,” sources in the company said.
Analysts, too, believe that projects launched at this time will get good sales traction. “With mortgage rates hovering between eight and nine per cent and developers focusing largely on the mid-income/affordable housing segment to drive volumes, we expect strong traction in sales volumes in H2FY20 across the board,” Adhidev Chattopadhay, research analyst at ICICI Securities, said in a recent report.
Thanks to the number of unlisted developers grappling with high debt, funds crunch and stalled projects, home buyers have become more discerning over the last couple of years. Even so, there is enough interest in new launches from leading developers with a strong execution track record, Chattopadhyay said.
“If the product, pricing and location are right, the product is selling. Unsold units are either unaffordable or at wrong locations,” added Balaji Rao, managing partner at Axis Asset Management.
Amit Goenka, chief executive and managing director at Nisus Finance, a Mumbai-based fund manager, said that though the ban on subvention schemes has hit property sales to some extent, developers are expected to come out with deferred payment schemes for buyers.
“The launch of affordable projects by listed, branded players have found favour with buyers. New launches should do well,” he said.
According to Chattopadhyay of ICICI Securities, unlike Mumbai and NCR markets, the South India market continues to see stable demand, with developers focusing largely on middle-income and affordable housing launches. Firms are also doing what they can to push sales. For example, Prestige Estates held an activation event called “Keys 2019” from October 11-13, where it offered various schemes across its projects. Prestige also has several launches lined up in H2FY20.
Brigade Enterprises and Sobha Realty, too, are launching new phases or projects across south India.