Karnataka: Housing sales up as vaccination drive, festivals lift mood

BENGALURU: After the slowdown during the second wave of Covid-19, the property market is picking up, thanks to the progress in vaccination drives and festive mood among homebuyers. The market, especially sales of new housing units, started to improve in July, after the state government unlocked sectors to kick-start the troubled economy, and saw further activity in August.
Data from the stamps and registration department for the two-month period shows the positive sentiment on the property front. In July, more than 2.1 lakh property documents were registered, generating revenue of Rs 1,217 crore. The most sales were recorded between August 8 and 20 after Aashada, considered an inauspicious phase, ended, and officials expect document registrations in August to go up to 3 lakh.
New home sales, which had remained stagnant for 18 months, have increased sharply in recent weeks, easing worries in the real estate sector that faced repeated pandemiclinked disruptions and shortages of labour and raw materials. According to officials of the revenue department, new homes sold in Bengaluru and the rest of the state have been 10-30 per cent higher in the July-August period compared to the average sales seen during pre-Covid years.
Suresh Hari, the chairman of Credai-Bengaluru, said that the sector was showing signs of revival after almost 18 months of a lull. He added that low rates of home loans, certain tax benefits and creditlinked subsidy schemes of the central government had helped improve the sentiment. The state government’s measures, such as reducing stamp duty from 5 per cent to 3 per cent for homes priced between Rs 21 lakh and Rs 45 lakh, and pent-up demand have also fuelled the revival, say some other experts.
“Over the past one and a half years, people have realised the importance of owning property and having a permanent roof over their head, and this sentiment is driving the demand for real estate,” said Gaurav Mohta, the chief marketing officer of Home First Finance. Developers are making extra efforts to woo buyers by offering deal sweeteners such as per sq ft rate discounts and an extended timeline to pay the down payment.
According to Darshan Govindaraju, the director of Vaishnavi Group, property prices have stabilised in the wake of the pandemic and many people see this as the best time to invest as they anticipate rates to increase in the coming years.
Errol Fernandes, the chairman and managing director of Ferns Estates, said that the stock market had made significant gains in the past year. “Historically, we have observed that real estate prices invariably follow with a lag, and this view is also driving the housing market,” Fernandes explained.
Citing US billionaire Warren Buffett’s line “Time is the friend of the wonderful business...”, Monica Matthias, the director of Hoysala Projects, said that a well-chosen property could also be a potent financial ally over the years. “So, buying property today could well prove to be a value purchase,” Matthias said.