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Builders luring buyers with big discounts

Following the slump in the sales of flats, builders have now begun attracting prospective buyers with discounts on their purchases. Naresh Kamath reports.

mumbai Updated: Jul 11, 2011 00:34 IST
Naresh Kamath

Following the slump in the sales of flats, builders have now begun attracting prospective buyers with discounts on their purchases.

The discounts are based on the quantum of amount paid by the buyers. Paras Gundecha, president, Maharashtra Chambers of Housing Industry (MCHI) said that discounts are because of low sales.

“Some builders are facing a cash crunch because of low sales and hence are offering discounts,” said Gundecha. “The aim is to fund the existing projects,” he added. Gundecha agreed that the ultimate beneficiaries of the discount schemes are the consumers.

According to realty experts, one of the top builders in Goregaon has now slashed his rates to Rs10,000 per sqft from the earlier Rs13,000.

Similarly, another prominent builder is offering to reduce his price to Rs15,000 per sqft onwards for his project at Bandra-Kurla complex on payment of the full amount. He is currently selling in the range of Rs22,000-25,000 per sqft.

At Prabhadevi, a builder is ready to sell at Rs18,000 per sqft despite keeping his official rate at Rs 25,000. Similarly at Bhandup, a builder is offering Rs7,000 per sqft when his rate is Rs8,500.

Yeshwant Dalal, president, Real Estate Agents Association of India said that despite the discounts, flats are not being sold. “Homebuyers hardly have the kind of cash demanded by builders and with home loan conditions being stringent, sales are a big casualty,” said Dalal.

Apart from tightening lending norms, the Reserve Bank of India has also hiked the interest rates on home loans.

Dalal said that homebuyers are swayed by the market sentiments of prices coming down and hence are adopting the waiting game. This could be gauged from the fact that the number of property sale registrations fell to 29,684 in January–June, 2011.

This is 20.2% less compared to 37,174 during the same duration in 2010.