Home sales down as buyers in wait-and-watch mode

Home sales down as buyers in wait-and-watch mode
Home sales down as buyers in wait-and-watch mode Home sales down as buyers in wait-and-watch mode Hyderabad: Hyderabad has seen 36 per cent decline inresidential property registrations at 5,181 units in August 2022, when compared to 8,144 units in the same month last year, says the latest report of real estate consultancy Knight Frank India. It says the registration value of residential units decreased 30 per cent at Rs 2,658 crore in August 2022 against Rs 3,810 cr in the corresponding month previous year. According to the realty experts, this is a regular trend before elections.
As there is a dilemma among the property buyers about the upcoming government in the State, majority of them are in a wait-and-watch mode. A stable government can boost the real estate activity not only in Hyderabad but across the State. "Today, there is some ambiguity among the home buyers ahead of the elections but the demand for residential properties in the city has not come down," says V Rajasekhar Reddy, General Secretary, Hyderabad Chapter of realtors apex body Confederation of Real Estate Developers' Associations of India (Credai).
He said, "The buyers anticipate a price correction. However, I personally don't see any chances. Higher raw material costs may not allow the realtors to reduce the rates.
As of now, there is market for high-end properties in the city. The builders are confident of selling the flats with a size of 8,000-16,000 sft. " Over last few years, Hyderabad real estate sector has witnessed potential cash flow with more IT professionals investing here with an expectation of guaranteed rental income.
Till date, transactions for larger size units are happening in the city. Only the sales of small and mid-size units have come down here. As per Knight Frank India's report, the trend that was set during the pandemic by the consumers to move into larger living spaces continued to hold strong.
The homes in the size of 1,000 – 2,000 sft were 72 per cent of all sales registered during the period. The demand for less than Rs 25-lakh ticket-size flats weakened with its share constituting 16 per cent in August 2022 against 35 per cent last year. Larger ticket size homes with ticket-sizes of above Rs 50 lakh increased to 29 per cent in August 2022 from 28 per cent in year-ago period.
Rajasekhar Reddy further said, "More of the investments have gone into UDS (undivided share) sales in Hyderabad and surrounding areas. Roughly about Rs 20-30 crore has been invested in the UDS sales. Moreover, several projects are being sold out in pre-launch sales that don't come for registration anywhere soon.
" Out of the property cost, almost 40 per cent is being given to the government in the form of various taxes. The tax burden is ultimately transferred to the home buyers. As the government aspires to provide 'Housing for all', it shall remove the GST on affordable residential units.
The Credai member says, "If the government cannot afford to give tax exemption, it may charge a nominal percentage at least for 2-3 years under a special drive. This will encourage the middle-class home buyers and keep them away from buying the properties under pre-launches and UDS sales. " The property purchasing decisions are also being delayed with an expectation on lower interest rates on home loans.
However, bankers don't agree to it. "Interest rise has not impacted the demand for home loan as demand is a mostly need based," said Jogesh Chandra Sahu, GM (NW-I), State Bank of India, Hyderabad. Expressing similar views, UCO Bank MD & CEO Soma Prasad says: "The hike in interest rates has no impact on the home loan business.
The demand for homes has gone up post pandemic because of work-from-home, and also because of the need to have security. " Generally, people don't invest in properties during June to August period due to Ashada Masam (inauspicious month) and children education costs. Also, many new launch projects were sold in August 2022 but not registered during the same month.