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« Bangalore Based Developer to keep Escrow Account for Housing Projects | Home | DLF Scales Down Hotel Business to Focus on Residential, Office Properties »

25% Decline in Real Estate Transactions during Shradh

With the real estate sector still grappling with slow demand, a fortnight-long Shradh period, believed by many home buyers as inauspicious may put pressure on sale figures of realty companies in India. Shradh or Pitri Paksh fortnight which started in the first week of September this year and is ending ahead of the Navratra festival, sees lowered buying activity. Realty companies, however, factor in this phenomenon which takes place before the festive season. According to Raminder Grover, CEOHomebay Residential of global real estate consultancy Jones Lang LaSalle Meghraj (JLLM), as during all periods of traditionally depressed activity, there has been a transient drop of 20-25 % in actual transactions during this period.

However, independent brokers whom SundayET spoke to quoted this as a much higher figure, saying that atleast 50-60 % dip in transactions has been seen during this period . “People want to commit themselves only on an auspicious day. Developers too will come up with project launches only after this period. There has hardly been any activity during this time,” says Pankaj Jain, executive director of Realistic Realtors, a North Indian real estate consulting firm.

Usually developers too refrain from making any major launches at this time due to a lack of buyer interest. In fact, there haven’t been any incentives or schemes by developers to propel buying activity during this period. According to Anshuman Magazine, CMD of global real estate consultancy CB Richard Ellis (CBRE), transactions have more or less halted . He, however, says that it’s a notional loss. “Transactions are down to zero in many places. But it’s a notional loss in the sense that it’s mainly a delay of two weeks. The fact is that it’s not just the buyer, even sellers don’t want to sell at this time.”

Developers, however, refute the claim that this has meant a loss to the real estate sector in any way. Says Rohtas Goel, CMD, Omaxe, “There has been a 15-20 % impact on sales. Even if people conclude deals, they would sign a cheque dated for the 1st day of the Navratras. We haven’t done any project launches during this period either and no price discounts are given. Yet, sales will easily be made up in the Navratra period which commences now.” While Goel still admits to the drop, Niranjan Hiranandani, MD of Hiranandani Developers calls it a ‘no loss’ period . “There has been no impact of Shradh on real estate buying,” he points out.

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