Housing sales are likely to remain subdued during the upcoming Gudi Padwa festival as prospective home buyers and investors are still cautious, property consultant ANAROCK said.
The sales during the first quarter of 2017 stood at 45,000 units, half of 90,000 units in Q1 of 2015, indicating shift in consumers behaviour, it added.
ANAROCK said that the Gudi Padwa festival season is considered as an auspicious time to invest in real estate.
Considered a time of renewal, it coincides with Punjab's Baisakhi, Tamil Nadu's Puthandu, Andhra Pradesh's Yugadi and Kerala's Vishu, it added.
The real estate developers offer lower prices under the guise of festival discounts to boost their sales.
"Since a large cross-section of Indians tends to link property acquisition with auspicious dates, activity levels on the property market tended to increase visibly in this period. However, Gudi Padwa 2018 is not likely to bring the accustomed uptick," ANAROCK Chairman Anuj Puri said.
Stating that sales were slow during this festival even in the last 2-3 years, Puri said the sector is facing more complex set of challenges than ever before.
"The residential real estate market in many cities has been slowing down, and developers are hoping that Gudi Padwa will prove to be a turning point for many developers who have been struggling with slow sales as well as policy-induced compliance pressures and generally negative market sentiment," Puri said.
Structural changes and policy changes such as demonetisation, RERA and GST have helped bring sanity in the Indian real estate sector. Investors, who were instrumental in driving up prices in previous years, are no longer a major factor either.
However, the consultant said that Gudi Padwa 2018 arrives in the backdrop of a still-tepid housing absorption in major cities.
"This can be attributed to the fact that Indian real estate sector is still in the throes of a major course correction a journey that has put buyers into an extremely cautious mode which is unlikely to relent on mere tradition-based grounds," Puri said.
On a positive note, ANAROCK said the restricted new launches and developers' increasing focus on project completions would reduce unsold inventory and demand will soon begin to rise.
However, this will not happen in time for Gudi Padwa to save the day, it added.