Demonetization has turned many potential home-buyers into fence-sitters. Hopes of an interest rate cut were dashed when the central bank chose to maintain status quo in its latest monetary policy decision. But there is light at the end of the tunnel. Developers in Bangalore are coming up with innovative ways to lure the fence-sitting home-buyer. So what’s really on offer?
Developers innovate to attract customers
Even without banks reducing interest rates, Bangalore-based Unishire Group is offering its customers home loans at 6%. They are promising to pay the difference between the prevailing interest rate for the first 3 years and have extended this scheme to 7 of their on-going and under construction projects.
“The most tangible thing post demonetization is for home loan rates to come down and so we wanted to offer our clients something well in advance. We are seeing a lot of buyer interest since we launched the scheme” claims Vinay Mehta, executive director at Unishire.
Other developers too are following suit and have similar offers in place. Take for example Ozone Group who are offering interest rates as low as 5% for customers interested in their gated community project Ozone KNS Oasis. Shriram Properties is advertising their Christmas offer where customers can save between Rs 3 to 18 lakhs from an array of their products.
No price correction in Bangalore?
Another hope home-buyers had was to see a correction in prices. People are holding back on property purchases in anticipation that developers will slash prices to the tune of 20% to 30% as is being widely rumoured. The developer community, however, has come out unanimously to clear the doubt that Bangalore will not see any price reductions.
“Let me assure people that if they wait and watch, the prices are only going to increase in the future, there is no chance of prices coming down as they are already at rock-bottom” Irfan Razack, CMD, Prestige Group
“Our profit ratio is only 20-30%. If we reduce rates by 30%, it will not help us. We’d rather wait for 3-4 months than slash prices by 30%” said Vadaprasad Reddy MD of Siri Homes.
So it is almost certain that prices in Bangalore will not come down. Developers are also talking about constraints in supply going forward. And with no interest rate cuts just yet, should a home-buyer just take what is on offer or should they continue playing the wait and watch game? Demonetization has definitely pulled out some more questions from the box.
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