Realty bites developers: expect freebies, sops
Looking to buy your dream home this Christmas? Chances are that you may land yourself a fairly good deal with developers looking to offer discounts and other freebies, thanks to stagnating sales, mounting debt and rising inventories, say industry trackers. Sachin Dave reports.india Updated: Dec 10, 2012 23:00 IST
Looking to buy your dream home this Christmas? Chances are that you may land yourself a fairly good deal with developers looking to offer discounts and other freebies, thanks to stagnating sales, mounting debt and rising inventories, say industry trackers.
The top 25 listed real estate developers have Rs. 40,000 crore of debt on their balance sheets while their net profits declined steadily over the past seven quarters."There is a downward pressure despite prices getting stagnated for the past one year and some developers launching projects at lower price," said Anshul Jain, chief executive officer, DTZ. "Customers would get discounts and other deals, but it would not be advertised openly, so they should bargain with developers for the same."
“DTZ recently launched a project in the National Capital Region (NCR) at Rs. 6,500 per sq, which is lower than the asking price by the developer in the same area and similar project eight-nine months back,” said an industry tracker.
Customers can also wait as more developers are likely to either cut prices or offer discounts, say analysts.
The net profit of top 25 listed real estate companies have been falling year-on-year," according to a report by real estate consultant Knight Frank. “The net profit of 25 listed realty companies has been consistently declining in the last seven quarters from Rs. 130,000 crore in the fourth quarter of 2010-11 to Rs. 987 crore in the second quarter (July-September) of 2011-12,” said Samantak Das, director, Knight Frank.
The revenue of these companies has also been falling and industry trackers say the continuous fall in revenues has put pressure on developers to slash prices.
“Next 8 months are going to be slow as far as sales are concerned for realtors, and customers can take advantage of that. Mumbai is expected to see more discounts compared to NCR,” said Jain.