Diwali 2024: Why is this festive season ideal for first-time homebuyers?

The festive season, stretching from October to December is a time of jubilation and fresh starts. For aspiring homeowners, it's an important time of the year to take the leap and purchase their dream home. Real estate developers and financial institutions roll out exclusive offers, discounts, and financing options, making it a buyer's market.

1. Festive Offers and Promotions by Developers

One of the most prominent reasons the festive season is ideal for first-time homebuyers is the abundance of promotional offers from real estate developers and bankers. These plans help alleviate financial bottlenecks, especially for first-time buyers. According to a survey, 70% of homebuyers consider flexible payment plans a key factor in their purchasing decision, according to a Knight Frank report.

To attract potential buyers and capitalize on the heightened demand during this season, developers often offer various incentives such as:

Waived Fees: Many developers offer to waive stamp duty, registration charges, or other ancillary costs associated with purchasing a home. These waived fees can significantly reduce the overall cost of buying a property. This can save buyers approximately,  ₹2-3 lakhs on a ₹50-lakh property.

Add-Ons: Some developers sweeten the deal by including free modular kitchens, home furnishings, or even parking spaces. These added perks, which would otherwise come at an additional cost, make the home-buying experience even more attractive.

Extended Payment Plans: During the festive season, many developers introduce flexible payment plans, such as no pre-EMI (Equated Monthly Installment) until possession or reduced down payments. This alleviates financial pressure, especially for first-time buyers who may be cautious about cash flow management.

2. Attractive Financing Options from Banks

To complement the offers from developers, banks and financial institutions often roll out special loan schemes and favorable interest rates during the festive season. This is a period where banks compete to capture the attention of prospective buyers, offering:

Reduced Interest Rates: Interest rates on home loans are often lowered during this period to entice new customers. Even a marginal reduction in interest rates can lead to significant savings over the loan tenure, making it a crucial consideration for first-time buyers.

Flexible Loan Terms: Some banks offer extended loan tenures, reducing the monthly EMI burden. This makes the purchase of a home more financially viable, allowing buyers to stretch their repayments over a longer period.

Processing Fee Waivers: Financial institutions may waive or reduce loan processing fees during the festive season, further reducing the cost of securing a home loan. This is especially beneficial for first-time buyers who are already working within a tight budget.

Special Financing Schemes for First-Time Buyers: Banks may also introduce special schemes tailored to first-time homebuyers, such as lower down payment requirements, deferred payment options, or reduced documentation requirements. These schemes make it easier for individuals with limited resources or credit history to enter the property market.

3. Auspicious Timing

For many buyers, particularly in regions with strong cultural and religious traditions, the festive season is considered an auspicious time to make major life decisions, including buying a home. Purchasing a property during this period is a positive and prosperous step, leading to greater psychological and emotional satisfaction.

This cultural aspect creates a sense of urgency and motivation among buyers, prompting them to make the leap. Developers and banks understand the emotional significance of this period and use it to market their offerings more aggressively, leading to a favorable environment for first-time buyers and in fact all real estate consumers.

Moreover, Government incentives and subsidies for first-time homebuyers are available year-round. These initiatives include subsidised housing schemes like the Pradhan Mantri Awas Yojana (PMAY), offering interest rate discounts of up to 2.67% on home loans for properties under 60 square meters and loans up to Rs 6 lakh, making homeownership more affordable for lower-income families.

Additionally, tax benefits such as deductions on home loan interest and reduced property taxes can ease the financial burden. Affordable housing initiatives, such as approving over 1.5 crore houses under PMAY, continue to support homebuyers throughout the year. Customers who purchase homes during the festive season can take advantage of these government incentives as well, adding to the financial benefits of buying a property during this period.

Thus, for first-time homebuyers, the festive season offers a unique combination of cultural significance, financial incentives, and a competitive real estate market. From attractive discounts and flexible financing options to government subsidies and abundant inventory choices, this period is ideal for taking the plunge into homeownership. With careful planning, first-time buyers can leverage these opportunities to make their dream of owning a home a reality. As the season brings with it a spirit of optimism and new beginnings, the path to homeownership becomes more attainable than ever.