Get furniture free in your flat or get a car parking free if you buy an apartment — or simply grab a 10 to 15% discount on a property. Such are the bargains being offered by real estate developers as they see their sales drop.
Inventories have piled up to alarming levels for developers who had borrowed a lot to build — which means they are in a mood to unload at lower prices.
Industry watchers say this is a quiet trend, not seen in the advertising hype. The inventory pile-up, and hence the special offers, are mainly in high-end apartments that cost upwards of Rs. 50 lakh.
Homing in on big deals
“There is a situation where developers are witnessing a fall in sales especially in unfinished products as projects are getting delayed,” said Thirumal Govindraj, executive director, global corporate services at property consulting firm CB Richard Ellis India.
Sales have hit the nadir across India and especially in the Mumbai Metropolitan Region and the National Capital Region. New projects are being launched at slower pace and experts say developers are resisting pressures to slash prices by as much as 30% — when customers could flock.
So, is it a good time to enter the real estate market? “It is a good time. But next six months are going to be a better time for the end-customer,” said Ambar Maheshwari, managing director of corporate finance at Jones Lang LaSalle India.
The country’s biggest listed realtors like DLF and HDIL have inventories worth Rs. 15,234 crore and Rs. 11,797 crore respectively, industry analysts say. Other players such as Omaxe and Oberoi Developers had inventories of Rs. 1,239 crore and R946 crore at the end of September.
Real estate developers are hopeful that interest rates will fall.
Industry experts say that prices in some of the projects could fall more but those from top developers in prime locations may not see a correction, and could even move up over the next year.