Enticing Buyers with Freebies
Stung by the bearish realty market, which is reeling under a price correction, real estate developers are now unleashing discounts, freebies and innovative schemes to lure buyers into residential space. Consider these: TDI is offering a free international trip for its Kingsbury Luxury Apartment buyers; Ansal Buildwell has advertised an inaugural discount on its project Florence Abode; scores of players are offering an ‘EMI holiday’ till possession on specific projects; while yet others are willing to waive prime location and such other charges or throw-in complimentary club memberships for new homeowners.
“In various markets, despite a slowdown in demand, developers have refrained from reducing rates. Instead some of them have started offering incentives such as club membership, parking lot, and better amenities to attract buyers,” says Ms Shveta Jain, Associate Director (Residential), Cushman & Wakefield India.
Assotech Ltd is giving buyers the flexibility of taking loans on vanilla flats, which incidentally do not include the cost of modular kitchen, shower cubicle and other so-called ‘frills’.
According to the Assotech’s Managing Director, Mr Sanjeev Srivastva, the company allows customers to pay for the ‘frills’ at the time of possession. This means that the buyers’ loan is reduced substantially and they save that much between the time of booking and possession, and can make the balance payment at the end of the purchase cycle. This works out to about 15 per cent of the price of the house — the payment flexibility could be close to Rs 4.5 lakh on a Rs 30 lakh home.
Parsvnath Developers, Parkwood Developers, JMD, and BPTP offer ‘EMI holiday’ schemes, while Ashiana has announced an ‘EMI-sharing’ scheme for its Bhiwadi project. Others like Uppal Group are contemplating similar offerings for their upcoming projects. “Although none of our existing projects has such offers, we are considering introducing them in certain projects which are in the pipeline. In the prevailing market situation, buyers are looking at solutions that make purchases more affordable for them,” says Mr Harmit Chawla, Vice-President, Sales, Uppal Housing Ltd.
Analysts point out that the generous discounts and sops are reflective of the current sluggishness in the Indian property market. “When the market was hot, everything came at a premium — even an apartment facing a so-called park (small lawn) attracted an extra levy in the form of a PLC. In contrast, some real-estate developers are now bundling-in parking charges and club membership as a package deal to catch consumer interest,” they add.
Signs of correction in the residential market are already becoming evident, and residential prices in some pockets are down by 10-15 per cent, while in other parts it has stabilised, says an industry observer.
A report by Cushman & Wakefield points out that both capital and rental values in Bangalore’s residential sector would ‘continue to stabilise’ during the next quarter, across select micro-markets (Whitefield, Kanakpura Road, Outer Ring Road) with a large number of investment-based properties expected to see softening of rates over the next two quarters.
In Delhi, while prices are expected to remain firm in most parts, a correction is expected in the peripheral locations of Manesar and Greater Noida in the short to medium term — even suburban locations of Gurgaon and Noida are likely to see price movements that are project specific.
The report further points out that capital and rental values in Mumbai would continue to stabilise over the next 3-6 months on account of upcoming supply, increasing interest rates and inflationary pressures — all of which will impact purchasing decisions.
Buyers and investors are in a wait-and-watch mode leading to a slowdown situation. As the sales momentum dips, a section of the market could either resort to price reduction or adopt aggressive approach to close deals through sweeteners, at least for a part of their project, to get the cash flows in place, Mr Kumar Gera, Chairman of CREDAI says.
Mr Anshuman Magazine, Managing Director of CB Richard Ellis feels that while demand continues to be robust for premium and even low-end housing, realtors will primarily target the volume segment in the residential market with such sweeteners.
Recently, a Pune-based builder offered air-conditioners and other fixtures at a significant discount to its customers. This whole business of discounts and freebies had started off in the face of fierce competition in the industry, and the trend is likely to accelerate in case the market remains in the slowdown mode.
Ms Jain of Cushman & Wakefield India agrees that certain high-end projects or apartments in prime locations would continue to see strong demand. These projects would not need to join the freebies bandwagon.
So while the residential market braces for a cool-off, it may be a good idea for prospective homebuyers to negotiate that hot bargain!
“In various markets, despite a slowdown in demand, developers have refrained from reducing rates. Instead some of them have started offering incentives such as club membership, parking lot, and better amenities to attract buyers,” says Ms Shveta Jain, Associate Director (Residential), Cushman & Wakefield India.
Assotech Ltd is giving buyers the flexibility of taking loans on vanilla flats, which incidentally do not include the cost of modular kitchen, shower cubicle and other so-called ‘frills’.
According to the Assotech’s Managing Director, Mr Sanjeev Srivastva, the company allows customers to pay for the ‘frills’ at the time of possession. This means that the buyers’ loan is reduced substantially and they save that much between the time of booking and possession, and can make the balance payment at the end of the purchase cycle. This works out to about 15 per cent of the price of the house — the payment flexibility could be close to Rs 4.5 lakh on a Rs 30 lakh home.
Parsvnath Developers, Parkwood Developers, JMD, and BPTP offer ‘EMI holiday’ schemes, while Ashiana has announced an ‘EMI-sharing’ scheme for its Bhiwadi project. Others like Uppal Group are contemplating similar offerings for their upcoming projects. “Although none of our existing projects has such offers, we are considering introducing them in certain projects which are in the pipeline. In the prevailing market situation, buyers are looking at solutions that make purchases more affordable for them,” says Mr Harmit Chawla, Vice-President, Sales, Uppal Housing Ltd.
Analysts point out that the generous discounts and sops are reflective of the current sluggishness in the Indian property market. “When the market was hot, everything came at a premium — even an apartment facing a so-called park (small lawn) attracted an extra levy in the form of a PLC. In contrast, some real-estate developers are now bundling-in parking charges and club membership as a package deal to catch consumer interest,” they add.
Signs of correction in the residential market are already becoming evident, and residential prices in some pockets are down by 10-15 per cent, while in other parts it has stabilised, says an industry observer.
A report by Cushman & Wakefield points out that both capital and rental values in Bangalore’s residential sector would ‘continue to stabilise’ during the next quarter, across select micro-markets (Whitefield, Kanakpura Road, Outer Ring Road) with a large number of investment-based properties expected to see softening of rates over the next two quarters.
In Delhi, while prices are expected to remain firm in most parts, a correction is expected in the peripheral locations of Manesar and Greater Noida in the short to medium term — even suburban locations of Gurgaon and Noida are likely to see price movements that are project specific.
The report further points out that capital and rental values in Mumbai would continue to stabilise over the next 3-6 months on account of upcoming supply, increasing interest rates and inflationary pressures — all of which will impact purchasing decisions.
Buyers and investors are in a wait-and-watch mode leading to a slowdown situation. As the sales momentum dips, a section of the market could either resort to price reduction or adopt aggressive approach to close deals through sweeteners, at least for a part of their project, to get the cash flows in place, Mr Kumar Gera, Chairman of CREDAI says.
Mr Anshuman Magazine, Managing Director of CB Richard Ellis feels that while demand continues to be robust for premium and even low-end housing, realtors will primarily target the volume segment in the residential market with such sweeteners.
Recently, a Pune-based builder offered air-conditioners and other fixtures at a significant discount to its customers. This whole business of discounts and freebies had started off in the face of fierce competition in the industry, and the trend is likely to accelerate in case the market remains in the slowdown mode.
Ms Jain of Cushman & Wakefield India agrees that certain high-end projects or apartments in prime locations would continue to see strong demand. These projects would not need to join the freebies bandwagon.
So while the residential market braces for a cool-off, it may be a good idea for prospective homebuyers to negotiate that hot bargain!