Dissect The Discounts: Should You Buy A Home Now?

Many Indian families consider the festive season an auspicious time for buying a home, and developers also know this well. As the festive calendar approaches, advertisements start popping up with offers of discounts, free upgrades, waived charges, flexible payment plans and so on, promising to make home ownership more affordable. Add to that, interest rates are stable and a large inventory leaves room for negotiation despite the price rise.

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.25 per cent since April 2026. That has kept home loan rates stable at 7.10-7.25 per cent for well-rated borrowers, says Santhosh Kumar, vice chairman, Anarock Group, a leading real estate consulting firm.

At the same time, residential prices continue to rise. Average residential values across the top seven cities rose 7 per cent year-on-year (y-o-y) in Q2 2026, while the Delhi-National Capital Region (Delhi-NCR) recorded a sharper 13 per cent increase and Bengaluru rose 8 per cent. Land costs, which have increased 50-120 per cent since 2021, along with elevated construction costs, continue to put pressure on property prices, according to Anarock. Kumar says any meaningful cooling in residential prices in the short-to-medium term is unlikely.

However, there’s room to negotiate. Available housing stock across the top seven cities touched nearly 601,000 units in Q1 2026, creating an inventory overhang (the estimated number of months it would take to sell all currently available properties at the current rate of market sales) of around 18 months, according to data from Anarock.

“This comes after a four-year decline in available stock and gives buyers somewhat more negotiating power than they had during the tighter market conditions of 2023-24,” says Kumar. However, that negotiating power is not evenly distributed. It depends on the city, micro-market, project and developer.

Large branded developers may not be under much pressure to cut headline prices. Instead, they may offer indirect benefits, such as flexible payment plans, waived charges, upgrades or other incentives. This is where buyers need to look beyond the banner advertising “10 per cent off” or “festive special”.

But there is an important distinction that prospective buyers need to make: a festive offer is not necessarily a good deal. The question is not even whether a developer is offering a great discount, but whether the house itself is worth buying at the final price, and whether the buyer can comfortably afford it.

Unpack The Discounts

Calculate The Real Price: The advertised property price rarely tells the complete story. Says Anuja N. Mukerji, partner, Aquilaw, a full-service law firm: “Buyers should assess the total cost of acquisition rather than focusing on the headline festive price. Depending on the project and transaction, the final cost can include stamp duty and registration charges, applicable goods and services tax (GST), brokerage, parking, maintenance, utility and infrastructure charges, common amenity charges and other project-specific costs.”

The best way to avoid unpleasant surprises is to ask the developer for an itemised cost sheet. That document should then be compared with the brochure, allotment letter and, most importantly, the agreement for sale. Buyers should also distinguish between statutory charges and those being levied by the developer or service providers. Parking and floor-rise charges, for instance, can materially change the final price; so can maintenance deposits and other project level costs.

Kumar says that additional costs tend to increase with the “luxury” factor of a project. Buyers should, therefore, be particularly careful when comparing premium projects simply because a developer is offering an attractive festive incentive.

Kumar cautions that festive discounts and freebies can sometimes mask only marginal savings because incentives may already have been factored into the base pricing. His advice is straightforward: calculate the effective per sq. ft, cost after all the charges, rather than being guided by the advertised discount.

The buyer needs to simply ask: How much will I actually pay to own this house? Not, how much is the developer claiming I will save?

Scrutinise Payment Plans: A construction-linked plan with a large final smaller initial instalment may look attractive, but could turn out to be more expensive from a financing perspective than a slightly costlier property with a more comfortable payment schedule.

For instance, consider a Rs 70 lakh home loan at 8.50 per cent for 20 years. With a regular repayment schedule, the total interest would be about Rs 75.80 lakh. Now assume a construction-linked plan where only 40 per cent of the loan (Rs 28 lakh) is disbursed initially and the balance is released at possession, two years later. The buyer pays pre-equated monthly instalment (EMI) interest of about Rs 4.80 lakh during this period. If the 20-year EMI tenure then begins on the full loan, the total interest works out to roughly Rs 80.60 lakh.

This shows how a lower-priced property with a back-loaded payment schedule can carry a higher financing cost, although the difference depends on the disbursement pattern, tenure and interest rate.

Thus, the cheapest-looking offer is not necessarily the cheapest purchase.

Don’t Neglect Due Diligence: Festive campaigns are designed to create urgency. “Limited-period offer”, “last few units” and “book today” are familiar phrases for buyers walking into a sales office. But urgency should never replace due diligence.

Mukerji says buyers should verify the developer’s title and development rights, as applicable, and check for mortgages, charges, litigation, encumbrances or third-party claims before paying a booking amount. They should also verify the Real Estate Regulatory Authority (Rera) registration and disclosures, sanctioned plans, commencement permissions and other approvals.

The buyer should confirm that the carpet area, specifications, amenities, construction status and promised possession date match the approved documents and Rera disclosures.

The booking form and allotment letter also need careful reading, particularly the clauses relating to cancellation, refund, forfeiture, payment schedules and defaults.

Says Mukherji: “Buyers should pay particular attention to possession and extension clauses, force majeure provisions, area variation and price-adjustment mechanisms, and the developer’s rights to change project layouts, specifications, or amenities.”

Understand The Clauses: This may sound like tedious paperwork at a time when the sales representative is talking about a festive bonus or a free upgrade, but spending an extra hour is worth it.

For instance, a Rs 5 lakh festive discount may be subject to conditions, such as booking by a specified date, making a certain percentage of payment within a fixed period, or retaining the booking for a minimum period. Buyers should check whether the offer is conditional on timely payments and what happens to the benefit if they cancel the booking or default.

Also, if the festive offer promises a discount or freebie, that benefit should be recorded in writing. A verbal assurance from a salesperson may sound convincing at the time of booking, but what ultimately matters is what appears in the binding documents.

Says Mukherji: “They should check whether promises made in advertisements, brochures or by sales representatives are incorporated into the binding documents. Defect-liability provisions, transfer rights, termination clauses and remedies in case of developer default also deserve attention.”

Mukerji says a buyer should ask not just “How much am I saving?” but also “What am I agreeing to in return?” That question becomes very important when a developer is offering an unusually large discount for immediate booking.

Should You Buy Now Or Wait?

For a financially prepared buyer who has found the right property at a reasonable effective price, the festive season could provide a useful window to negotiate better terms, especially in a market where the inventory is relatively high. Investors may also find opportunities in markets, such as Noida, Gurugram, Bengaluru and Hyderabad, where rental yields and capital appreciation have been relatively strong.

As far as price rise and interest rates are concerned, they are relative.

Sanjiv Bajaj, joint chairman and managing director, Bajaj Capital, a wealth management company, gives the example of a home loan of Rs 75 lakh over a 20-year tenure. He says a 25 basis point (bps) reduction in the rate of interest could lead to a saving of roughly Rs 1,100-1,200 a month. But if the property price rises meaningfully, while the buyer waits, that saving can quickly disappear.

“If rates have remained flat while property prices continue to rise, delaying a home purchase will only result in paying more for the same house down the line, with no benefit of lower EMIs,” adds Kumar.

At the same time, Bajaj cautions against buying simply because property prices might rise. If the downpayment wipes out emergency savings, the EMI stretches the monthly budget, or the buyer may need to sell the house within a few years, waiting could be the better option, he says.

Bajaj says buyers should look at the entire household balance sheet, including the take-home income, monthly expenses, existing EMIs, and future financial goals.

As a broad benchmark, total loan repayments should ideally remain within 35-40 per cent of monthly take-home income. The limit should be lower where income is variable or there is only one earning member in the household.

If the household can continue to maintain an emergency fund, pay for adequate insurance, and invest towards long-term goals after paying the home loan EMI, the purchase may be financially manageable. If the EMI leaves little room for these priorities, waiting may be the wiser choice.

Bajaj suggests four conditions before buying a home: “A stable income, a downpayment that does not exhaust family reserves, a comfortable EMI, and a long holding period of 7-10 years.”

For buyers considering under-construction properties, festive payment plans can offer flexibility. But that comes with another consideration: construction and possession risk.

A lower entry price is of little comfort if a project is delayed for years. Kumar advises buyers of under-construction homes to remain conscious of construction timelines, and prefer large, reputed developers with stronger execution capabilities.

A house is a long-term financial commitment, and buying the wrong property or stretching the household budget too far can create problems that a festive discount cannot solve.

sanjeev.sinha@outlookindia.com