With a liquidity crunch and meltdown fears likely to further hit purchase decisions, real estate developers are offering 30 per cent discounts to clear inventories and start new projects. You can expect more discounts, as realtors come to grips with the reality of oversupply and high margins and lose market stamina.
For genuine buyers with money, they are willing to enter into “exclusive talks” to finalise deals with special discounts. Prices in Delhi, Bangalore have crashed by up to 50 per cent.
Developers like Oberoi Constructions and DB Realty are offering new projects at 30 per cent discounts. Oberoi is offering new project at Goregoan east in western Mumbai for Rs 7,500 per sq ft against Rs 12,000 in ready flats.
Similarly, DB Realty has started a new project at Kandivali west with an opening price of Rs 5,500 per sq ft against the prevailing market rate of Rs 8,000 in the area. In south Mumbai, prices have also crashed substantially.
Developers are blinking due to complete halt in transactions in the last six months as buyers stayed away from the market due to high realty prices.
“Now banks should lend up to 80 per cent of the cost of flats. Home loan rates should be cut to 7-8 per cent. This would create demand,” said Niranjan Hiranandani, managing director, Hiranandani Constructions. “If construction activity stops, 10 lakh construction workers will be without job in three months.”
Rajni Ajmera, president, CREDAI who has asked developers to slash prices said, “Now buyers can get best possible rates. We want to do business and are willing to sacrifice profits.”
In a buyers’ market and developers have no choice but settle for less. “If you have money, negotiate. You will get your rate,” said Anuj Puri, chairman, Jones Lang LaSalle Meghraj, the Indian arm of global realty consultancy JLL.