Will Diwali light up Chennai’s Property Market?

In the last two years, Chennai’s developers have been trying out various out-of-the-box ideas to attract buyers and increase their revenues. With the festive season here the city’s builders are now resorting to perhaps their last option: heavy discounts.

The beginnings of what promises to be a price correction in home real estate in terms of discounts per sqft and freebies could get a dragging Chennai market back on its feet. But is the homebuyer banking on freebies to zero in on his dream home?

Just like many others who have been looking for the right home that fits in the budget is 35-year old Prabhu. He had been looking at houses for a long time and is now excited to have made the best decision of his life this festive season with Doshi Housing’s Risington, priced at an incredible 25 percent below the market rate.

A spacious 3BHK along the OMR where he has been working for the past 19 years is now his dream home. “Buying a home is a major event in everyone’s lives. So freebies and discounts actually don’t matter. Prices naturally tend to appreciate, but we as consumers like the prices to go up when we’ve already bought the apartment. But we don’t like them going up, when we decide to buy an apartment. When Doshi made this announcement, the cost per square feet didn’t really matter; it’s just about whether the whole package fits in your budget,” says an excited Prabhu.

Other builders in the city too have followed suit with offers such as free car-parking,waiver of extra charges for higher floors and home furnishing to woo the homebuyer. Prince Foundations provides a 12 month EMI waiver and the opportunity to earn rental income, while KG Developers offer up to Rs 500 off per sq.ft in their Diwali Damakaoffer. There’s more. Those buying BBCL’s luxury apartment wouldn’t have to pay EMI till handover. Pacifica, Casa Grande, Isha Homes, Embassy are others offering similar offers.

Inspite of special schemes, many developers have been struggling to sell more than 10 properties a month; but with the new pricing, Doshi Housing has managed to touch a ten time high, hundred units in the launch month only.

Mehul Doshi, CEO of Doshi Housing spoke about the apprehensiveness of people booking a flat and in order to assure the customer, they had a USP in place, “What we found out was that people were postponing their decision, because they felt that there could be a price correction in the markets, may be a fall in the prices or maybe a better offer. So what we told our customers is that this new project we are launching is at a fantastic price and there is no way the price can go below this and if it happens we’ll refund the difference to you. So the idea we wanted to convey to the customer was that their investment is totally safe.”

Builders are expecting a 15-20%increase in sale this season. 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? Although freebies have been gaining a lot of interest from homebuyers, low prices seem to be the real deal-clincher.

Ganesh Vasudevan, CEO of India Property explains how Chennai is an end-user driven market and no number of offers can influence the homebuyer. “There is a lot of prework that goes into a buying a home. It is a highly emotional decision. Perhaps the most expensive decision of a lifetime, for most people. It involves seeing research, field visits, meeting the builder, speaking to the neighbours in the area, seeking opinion from family and friends who’ve already bought a property, speaking to financiers regarding home loans – all this happens prior to signing that final cheque. An offer can at most hasten someone who has already part of this course into finalizing this deal, he will not change his mind when a good offer is available.”

What will truly make a difference is if the overall industry takes a consolidated effort to offer affordable homes within the city limits. The season seems to have had a slow start and experts are convinced nothing will bring back buyers except for aggressive pricing.

Smitha TK, Reporter, NDTV


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