 "500 realty projects on sale with offers, schemes")
Offers and discounts for potential property buyers have touched a new high, with sops ranging from a Singapore trip to a 30 gm gold coin to free stamp duty and registration worth lakhs of rupees.
Also, there are dozens of schemes, promising you Activa, Nano, Swift Dzire and the list goes on. Besides, subvention plan or 20:80 as it is popularly referred to, wherein a buyer has to pay an upfront amount while the rest is paid at the time of possession, are a part of the game now.
As many as 500 projects across India are offering some scheme or the other, in a bid to push sales in an otherwise slow market. According to Magicbricks.com, an online property portal, Mumbai has the maximum number of projects with schemes/discounts at around 88, followed by Delhi with 56 and Chennai and Pune with 33 each. Kolkata has 30 such offers, while Hyderabad has 18 and Bangalore has 16. On a pan India level, Magicbricks has about 274 projects with discounts offer.
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Sudhir Pai, Business Head, Magicbricks tends to think such offers from developers have gone up substantially in the last couple of quarters.
“There is a fair amount of supply in the market, this is why developers are coming out with various schemes to push transactions. The number of sale transactions happening in the ground has come down in this quarter, despite the number of enquiries."
Sanjay Sharma of Qubrex said it is a strong indication that developers have exhausted all other marketing gimmicks. ”It is challenging for developers to sell in these market conditions.”
Real estate sector has been battling a slowdown and the year 2012 has witnessed low sales and hardly any new launches. The companies, reeling under high debt, are now under pressure to clear the huge inventory pile up. The inventory level has almost doubled in the last three years. In the National Capital Region, the inventory level reached 31 months at the end of March 2013 against 15 months at the end of March 2010, while in the Mumbai Metropolitan Region the inventory level has jumped from 17 months to 40 months. In Hyderabad, it reached 49 months in March 2013 as compared to 23 months in March 2010, according to data by real estate research firm Liases Foras. Inventory denotes the number of months required to clear the stock at the existing absorption rate. An efficient market maintains an inventory of eight to ten months.
Samir Jasuja, CEO and Founder, PropEquity agreed with Pai and said, “Most of them (developers) are currently experimenting with different options to boost sales. Limiting the supply through controlled new launches, lucrative schemes and offer pricing are helping the developers offload their inventories and saving them from drastic measures like price correction.”
Because of the slowdown, experts also believe that going forward, new projects would be launched at a lower price. Shveta Jain, Executive Director – Residential Services, Cushman & Wakefield said “Future launches will be done with rational prices, besides realistic products which will be tuned to the market conditions”.
“I would not be surprised to see newer launches at lower prices so as to attract demand. The exorbitantly priced investor led markets might see slight adjustments to align themselves to the market sentiments,” Jasuja adds.