Bengaluru/Mumbai: Potential homebuyers expecting price cuts in the upcoming festive season may have to settle instead for freebies, flexible payment plans, and some cash discount, as builders hold on to prices.
Five years into the real estate slowdown, developers have pinned their hopes on a robust sales season this time, but are still unwilling to lower prices, apart from the correction that has already happened in different pockets.
Analysts, however, question if that’s enough to bring buyers back to the table.
“We are giving ₹3-9 lakh spot discounts in our projects in Thane, Borivali and Oshiwara, in Mumbai. This is done to boost sentiment and encourage people to buy homes. If the cost of the apartment goes down, that becomes the single largest motivator for potential customers,” said Parth Mehta, managing director, Paradigm Realty, which sells houses costing ₹60 lakh to ₹1.5 crore. The discount is offered during the nine days of Navratri this month. The offer may get extended during the entire month. Mehta said while the incentives will not lead to a sharp jump in sales, it would definitely help boost buyer sentiment.
Another Mumbai builder, Ruparel Realty, is offering a Scooty two-wheeler with every purchase in its suburban Kandivali project, but with a caveat that the buyer would get the vehicle at the time of possession of the flat and only “if the payment is done on time”. The homes cost between ₹60 lakh to ₹75 lakh.
“Prices are already attractive. Gifting a Scooty is just a token of appreciation for putting trust in our company. It doesn’t cost much,” said Amit Ruparel, managing director, Ruparel Realty.
Typically, the period between Dussehra and Diwali is preferred for buying homes. Given the tepid sales in the realty sector, developers are now divided between offering temporary incentives and long-term project and price solutions to buyers.
Bengaluru’s Shriram Properties Pvt. Ltd, for instance, is pre-launching a project at its lowest entry price of ₹20 lakh for a two-bedroom home.
“It’s a great opportunity for both investors and end-users. We think the affordability along with an interest subvention scheme we are offering will be attractive,” said Vyoma Pandit, chief marketing officer, Shriram Properties.
Anuj Puri, chairman, ANAROCK Property Consultants said launches have increased this year and apart from the usual freebies, cash discounts and offers like no-registration and stamp duty fees and no EMIs till possession, cash-starved developers are also coming up with other innovative schemes.
“…Some offers can be genuinely rewarding if the customer has picked the right developer and project. On the other hand, offers can also be misleading—for instance, if a financial scheme is not transparent and/or the buyer does not read and understand the fine print. Also, freebies only make sense if the property itself is of inherent value to the buyer,” Puri said.
Mumbai’s Nahar Group is not giving any festive discounts but instead will be offering certain gifts to customers. “In the past five years, cost of construction has increased, be it finance cost, material and labour cost. Even taxation has increased, but we have not increased the property prices,” said Manju Yagnik, vice chairperson, Nahar Group.
Pankaj Kapoor, managing director, Liases Foras Real Estate Rating and Research Pvt. Ltd said developers don’t want to lose customers today, which is why as many as seven different customised payment plans are being offered for new launches.
“A blanket reduction in prices is tough but developers are bringing down prices depending on how smart and demanding the customer is,” Kapoor said.