When the weather is getting cooler, markets are swarming with shoppers and the scent of jasmine teases the night sky, you know India is celebrating. The start of Navratri heralds a beautiful two months of festivals, rituals and merrymaking. Every family is doing their best to welcome Lakshmi, the goddess of wealth and prosperity into their homes. And in North India, the Navratri period followed by Diwali is considered the most auspicious time in the calendar to make big purchases. The biggest of them all is of course investing in property. And to bring the home-buyer back into the property bazaar, real estate developers have amped up their charm offensive this festive season.
Manoj Gaur, Managing Director of Gaursons India admits that “the last six months have been very lean for the sector and developers are banking on the festival season. With the approaching festive season, enquiries have picked up 15% against last year. We are hopeful that our beneficial schemes will bring us new customers.” Developers say their schemes are perfectly timed to ride the sentiment-boost that RBI’s recent rate cut has brought. Their hope is that their festive offers will push the fence sitters into the market.
Clever Schemes to Woo Home Buyers
In their goody-bag of festive deals, the EMI subvention scheme is the most popular. Payment plans like 5:95 or 10:80:10 are on offer where the buyer pays a certain amount on booking and then is EMI-free till possession. Developers like Noida based Prateek Group, Saya Group, JM Housing, SVP Builders, Paras Buildtech, Exotica Housing and Chandigarh-Tri City based Sushma Buildtech have launched the ‘No EMI till possession’ scheme.
But the jazziest and the most cleverly packaged festive deals come from Noida developers. Take for instance Ajnara, they are running a ‘Jackpot 7-7-7 scheme’. Pay only 7% and nothing till possession. You get your home in 7 months and you get a discount of up to Rs 7 lakhs. Others are playing on the emotional quotient of the festive season. Supertech has launched a ‘9 Days of Navratras – 9 EMIs free’ scheme across all its projects.
Gold has held its glitter in the eyes of festive shoppers for long. And real estate developers are joining in the gold rush. Noida-based Prateek Group has announced that on every booking, customers will receive a complimentary gold coin. Bhiwadi’s Avalon group, is offering gold worth 3 lakh rupees on bookings of 3BHKs and gold worth 2 lakh rupees on 2BHKs. FDI funded developer SARE Homes is going to distribute 5 kgs of gold on bookings across its projects all over India.
Freebies Galore this Diwali
Real estate developers are tickling the interest of people towards the property markets through attractive freebies as well. Gulshan Homz is giving add on goodies of a Modular Kitchen and split ACs. So are SVP Group, Mahagun and Shri Group. Fairwealth Group which is developing a project in Bhiwadi is offering customers a chance to win a Renault KWID when they book with them. Wave Infratech is giving gift vouchers worth Rs 1 lakh. KV Developers is running a lottery where home buyers get to win a sedan, a trip to a foreign locale and free home appliances.
However there are some who are offering something that is more meaningful to the home buyer today. Ghaziabad developer Aggarwal Associates has come out with new rates which are inclusive of EDC, IDC, Club and overhead charges. Aditya Aggarwal, Director, Aggarwal Associates says they are even upgrading few customers who book a 3BHK in Navratras to a 4BHK unit. “It’s like paying for an economy ticket and getting a free upgrade to business class” he says.
Home seekers we surveyed are all looking to seal their deal during Navratri and move into their new home by Diwali. With the uncertainty around several stalled residential projects across markets, ready-to-move in homes are all that buyers enquire about. And Gaur is playing up its advantage. It has a ‘Buy now and shift on Diwali’ scheme and is offering cash discounts of up to Rs 10 lakh on flats that cost above Rs 70 lakh.
What do Home Buyers want?
But is the promise of a free gift or special scheme enough to influence the home-buyer’s decision this Navratri? What is the home buyer really looking for? We visited several project sites over the weekend just before Navratri to gauge the mood among home buyers.
BK Sharma and his family are making the rounds of site offices of various developers around Greater Noida West in NCR. He says he is looking for a ready for possession project with all approvals and readily available bank finance. But a good price is the deal-clincher for him. “Humey proper rate chahiye taki hum bank rate down honay ka fayda utha sakey” says Mr Sharma.
The Garg family is also out browsing property markets for a new home. When asked if festive offers influenced his buying decision, young executive and newly-wed Akshay Garg was candid in his response. He says “investing money in property is a big thing for a common service man. Whether it is Diwali or any festival, what matters is what kind of discount they are giving, what kind of investment schemes are possible and what kind of bandwidth amount we have in our hand.”
So buyers are very clear in their wish list this festive season. Nothing else but discounts will do. But are developers listening? Vineet Relia, Managing Director at SARE Homes dismisses any such hopes. “If you look at the price component, there are 3 major aspects. Land, construction, cost of approvals and overheads. If you look at land, most developers buy approved or semi approved land. Construction cost has gone up. Recent hike in cement has hit developers. And margins are very low because the cost of selling is so high. And with the kind of schemes like EMI subvention being offered, there is no room for margins on a per square feet basis. For us we take land at replacement value. So there is hardly any margin for us now. We are sitting on the lowest point on a per square foot basis. Yes in terms of ticket prices we can definitely do with smaller units.”
What will Revive Home Sales?
Ok, so no price-cuts from builders yet. And banks are yet to pass on the entire benefit of the RBI rate cut to home loan borrowers. At the new interest rates, home buyers with long tenure loans will at best get just a Rs 1000 reduction in their monthly installments. Isn’t it time, that developers swallow the bitter pill?
Sam Chopra, Chairman and Founder of brokerage firm RE/MAX India says the key to reviving home sales is solely in the hands of the developers today. “Buyer wants a radical correction in prices. The buyer wants to know what is the benefit I get if I invest in today’s market conditions. Prices should be 20-30% lower than they are now. And will they slide down further. Who will reverse that downslide? It’s important for developers that instead of giving gold coins or cars or free trips, the buyer wants his EMIs to be reduced. He wants his initial installment to be reduced. He wants the final outlay of his investment to be reduced. If they do reduce, it will be Happy Diwali, Christmas and New Year. Otherwise the struggle continues.”
Whatever the deal your builder is eagerly pursuing you for, it’s not a good deal unless the buyer is assured of delivery, quality and the company’s operating health. But above all of that, the home buyer desires affordability from his developer this Diwali. And until he finds reasonable pricing on the right sized home, he is willing to wait it out for as long as it takes.
Vasudha Sharma, Anchor & Correspondent- The Property Show