Home sales failed to gather pace in the Navratra-Diwali season despite high decibel advertisement campaigns by developers, according to a survey by industry association Assocham. Property sales rose just 20 per cent over average monthly sales in sharp contrast to previous years when the sales generally doubled on account of Navratra and Diwali bookings.
"Despite aggressive marketing and great offers made by developers on the eve of Diwali festival, investment in property has remained lukewarm...," the Assocham survey said.
Modular kitchen, LED televisions and air conditioners were among the most common freebies on offer this Diwali. Some developers offered hefty discounts to the basic sale price for early investors. Many others warned of sharp revision in property rates post Diwali. However, the lure of freebies failed to charm home buyers, the survey noted.
The biggest reason for the lack of interest in property was high prices, the survey said. Last month, the Reserve Bank of India had said that most big cities, including Delhi and Kolkata, witnessed a sharp rise in property prices despite fewer sales in the first quarter of the current financial year ending March 2013.
Developers have cited high land prices and the unprecedented rise in the cost of construction material, iron, cement, labour, etc., for the rise in property prices.
Global research major Nomura had earlier attributed limited supply, especially in key markets such as Mumbai and Delhi, for the rise in property prices.
"(The) majority of developers have complained that inordinate delays in getting necessary approvals from multiple regulations and authorities result in cost and times overruns,” Assocham secretary general D.S. Rawat said.
Analysts expect demand for plots, houses and flats to drop by at least 15 to 20 per cent by March next year. The fall in sales, however, is unlikely to translate into a correction in property prices, according to recent trends.
The Assocham survey had participation from 250 property dealers, 40 developers and 20 divisions of housing finance firms across Delhi-NCR, Mumbai, Bangalore, Chennai, Kolkata and a number of other cities.