Buyers waiting for price correction, discounts to buy homes

At a time when developers are criticising the advice to reduce property prices to clear their inventories, buyers are waiting for further price correction and discounts to buy their dream homes, two surveys revealed.

According to two independent surveys conducted by property portals Commonfloor and Nobroker, a significant number of prospective buyers are hoping for further price reduction and more discounts.

Recently, in a virtual closed-door meeting held with Naredco members, Union Commerce Minister Piyush Goyal had urged developers to sell their inventories at reduced rates or else they would end up defaulting on their payments.

"...If any of you here feel that the government will be able to finance you in such a way that you can hold longer and wait for the market to improve, the market is not improving in a hurry. Things are seriously stressed and your best bet is to sell," Goyal had said.

Veteran bankers, including HDFC Chairman Deepak Parekh and Kotak Mahindra Bank Executive Vice-Chairman and MD Uday Kotak, had also pointed out that developers should sell off inventories by lowering property prices.

According to Nobroker survey of around 11,580 prospective home buyers from cities like Bengaluru, Mumbai, Pune, Hyderabad, Chennai and Delhi-NCR, 54 per cent respondents are expecting a significant reduction in property prices as the market currently has a lot of unsold inventory and construction of new projects is disrupted.

"It is anticipated that builders would focus on selling the available piled up inventory first," it said.

Similarly, as per the survey conducted by Commonfloor of over 3,000 potential buyers in Mumbai, Bengaluru, NCR, Hyderabad, Kolkata, Chennai, Pune, Cochin and other tier 2 cities, around 51 per cent of the respondents believe that more discounts might lead them to make the purchase.

Hit by the coronavirus-induced lockdown, liquidity stressed developers have been seeking one-time restructuring of loans, reduction in home loan rates, among others.

Both the surveys found that a significant number of buyers are looking at buying a house in the next three months.

However, the survey by Commonfloor also noted that nearly 56 per cent respondents have postponed their decisions to buy a home, while 39 per cent have dropped home buying plans due to the impact of the pandemic.

Watch Zee Business live TV below:

The survey by Nobroker revealed that demand for properties below Rs 60 lakh is higher as job uncertainty and liquidity crunch are the major causes of concern for home buyers.

The survey by Commonfloor found that 31 per cent of the respondents were looking at properties below Rs 20 lakh, 39 per cent preferred projects between the range of Rs 20 lakh and Rs 40 lakh, followed by those looking for homes below Rs 60 lakh.