Developers and lenders tap need for owned homes amid festive season

Discounts, virtual tours, flexible payment options--players pulling out all stops

This week, a prominent builder in Mumbai put out advertisements in newspapers, inviting people to pay only Rs 2 lakh and book a two-bedroom luxury apartment in the Sion-Wadala area, a residential locality in the central suburbs, on the occasion of Ganesh Chaturthi. 

Early birds would get a free two-wheeler and the advantage of locking in the cost price at Rs 96 lakh, way lower than the Rs 1 crore-plus that is typically quoted for a two-bed flat in this area.

The realtor’s phone hasn’t stopped ringing since the ad was released. 

As Anuj Puri, chairman, Anarock Consultants, puts it, the Covid-19 pandemic, with its attendant need for safety and security in these uncertain times, has underscored the importance of owned homes. So if the deal is sweet, there are lots of consumers who are keen to invest on a home.

Some experts argue that with inventory levels at record highs and home sales down 70 per cent in most cities in the June quarter, developers don’t have too many options at their disposal. Liquidating inventory is their top priority and to take advantage of the festive season, most are offering discounts, flexible payment options, on-call support, WhatsApp assistance, and even virtual tours and presentations for those unable to visit building sites.

In a bid to widen their customer base, many real estate players are also reaching out to non-resident Indians keen to invest in their home towns. 

Experts say that the convergence of online and offline in an industry such as real estate is a key lesson from the pandemic. And this festive season is seeing builders — small, medium, and large — put this strategy to use.

Take Bengaluru-based Brigade Enterprises. This month, the real estate firm will hold its annual exhibition, ‘Brigade Showcase’, virtually for the first time, in addition to holding an offline event. The company’s executives say that the experience has been simulated to resemble a regular expo, with specific stalls for various projects, and ease of entry, exit, and navigation for participants. The builder has also lined up flexible payment options at the expo to convert enquiries into hard sales.

“We realised that liquidity could be a concern for many and, hence, have come up with innovative financial schemes such as EMI holidays, says Rajendra Joshi, chief executive officer (CEO), residential, Brigade Enterprises.

Joshi adds that the booking and cancellation amounts have also been relaxed to ease the decision-making process of prospective buyers. For serious buyers, there are freebies on offer such as iPhones and other consumer durables.

Other realtors are also pulling out all the stops to lure prospective buyers. For instance, Puravankara has introduced ‘Purva Cash’, which is a virtual real estate currency that can be redeemed against any Puravankara or Provident (a subsidiary company) project during its upcoming Big 72 Hours sale in September-October. The developer has also lined up a mega online fest for Provident Housing during Dussehra.

“There is a positive sentiment towards home-owning owing to the pandemic. People are viewing real estate as a safe nest. They want to buy a house and live in it rather than live in a rented place. With this improvement in buyer sentiment, we are expecting greater traction in enquiries,” says Ashish R Puravankara, managing director (MD), Puravankara.

Puri endorses this view, saying that real estate sales this festive season will be driven by a “returning sentiment”. “Serious enquiries have already come back to 60 per cent of pre-Covid levels, and site visits are increasingly resulting in hard sales. Window shopping, a trend visible earlier, is down,” he says.

To tap into this momentum, Mumbai-based developers are banking on 10:90 schemes, wherein a buyer pays 10 per cent of the amount upfront and the balance amount is paid on possession.

Godrej Properties, too, is continuing its 10:90 scheme in some projects. Chairman Pirojsha Godrej recently told Business Standard that each project would have its own payment plan linked to the project strategy and funding requirements.

Mumbai-based Wadhwa Group has launched ‘Post-Paid Homes’, where buyers can move into its properties in the Mulund, Thane, Goregaon ,and Ghatkopar areas by paying 10 per cent upfront and the balance amount later.

Sunteck Realty, too, has launched a 10:90 scheme at Naigaon and Goregaon, where projects are almost ready and will be delivered in less than six months.

As for the non-banking financial companies and small banks, they are also launching new products — albeit, cautiously — to attract customers. The loans being disbursed are mostly for personal needs, transport, and housing finance.

For instance, Ujjivan Small Finance Bank has launched festive campaigns for personal loans with the twin objective of providing customers with instant finance and contactless documentation. “Our expectation is that the overall demand will pick up in October — November. While there is recovery right now, it should get better in the Dussehra-Diwali period,” says Umesh Revankar, managing director and CEO,  Shriram Transport Finance.

Deo Shankar Tripathi, MD and CEO, Aadhar Housing Finance, says that new requests for loans are at around 90 per cent of what it was during this time last year and that disbursements are at around 75 per cent. “We are seeing an uptick in demand for new loans in the ticket size of Rs 9-25 lakhs,” he says.

Homebuyers are slowly making their way back into the market.

Series concludes