Planning to buy a home? You may well strike a lottery this festive season. Tata Housing is offering a complementary free room in their flats. A developer in Noida is giving discounts on his property, with a minimum money-back guarantee of Rs 25,000 – but going all the way up to a 50% discount for 25 flats.
With residential real estate stuck on the flypaper in 2015, developers and property owners are taking recourse to such schemes to attract buyers. And the schemes have already started, a month before the festive season officially kicks off (see box below).
In the April to June quarter, sales growth actually fell into the negative territory. Real estate research firm PropEquity said sales growth across India in the first quarter (which is traditionally the lean season for the sector) was -5.7%; about 119,000 units were sold as against 127,000 units in the year-ago period, and 93,000 units in the same period in 2013.
“Demand exists, but what is holding buyers back are various economic factors. The buyer is waiting for the interest rates to come down. Once general economic conditions improve resulting in rupee stability, increased salaries and drop in commodity prices, it will lead to appreciation in sale,” said Sachin Sandhir, global MD, emerging business, at Royal Institution of Chartered Surveyors, a global real estate research firm.
With discounts, assured gifts and other marketing schemes, realtors are hoping for a bull-run till December.
“The Indian real estate sector is going through a slowdown as there is a major demand and supply mismatch across the country, especially in the NCR. The market is at its lowest levels currently. Developers may resort to offering more freebies such as cars with bookings, foreign trips, complimentary modular kitchens, free club memberships, free car parking etc,” said Samir Jasuja, CEO and Founder at PropEquity. “A major chunk of the bookings do happen in the festive season.”
Over the last two years, the October-December quarter saw sales rise as much as 23%, with 133,000 units sold in 2014 and 108,000 units in 2013, according to PropEquity.
PropTiger.com’s co-founder Dhruv Agarwala said: “We are in constant touch with developers... they are betting on the festival season. This time the advantage is with buyers thanks to relatively low prices and some exciting offers. We expect high sales this time.”
Jasuja said: “Markets have been slow to absorb new projects... We can expect aggressive marketing spends by developers to sell existing inventories; already developers are offering projects at almost zero booking amount.”
Now to see if the enquires translate into sales.