Property Exhibition 2008, a bi-annual event beginning from tomorrow, will be a testing stone for the efficacy of developers as property transactions across the country have dried up on account of high interest rates and a sharp escalation in prices.
The exhibition will be held from October 9 to 12 at the Bandra-Kurla Complex (BKC) in Mumbai. Organisers expect a turnout of nearly 85,000 people for the exhibition, with nearly 85 developers showcasing around 800 properties.
But analysts tracking the sector said changing the visiting crowd into potential buyers will be an uphill task, given the current market conditions. Home sales across the country have fallen over 40 per cent in the last nine months due to high interest rates.
| HARD HIT |
“Crowds will come, but buyers may not. The market sentiment is so bad that people are wary of buying properties now. It is really a tough time for developers,” said Akshaya Kumar, managing director, Park Lane Property Advisors, a property consultancy.
But the Maharashtra Chamber of Commerce and Industry (MCHI), the exhibition organiser, is doing everything to induce buyers to take an early decision on buying homes. “We expect at least the same amount of crowd, which turned up for our last exhibition in April. Given the current market conditions, we are not expecting huge numbers,” said Zubin Mehta, the chief executive of MCHI.
Developers are waiving off stamp duty and registration charges for properties booked during the event. Apart from this, developers, in a tie-up with financial institutions, are also sharing interest rates of 2-3 per cent for under-construction apartments for the next two to three years. Some of them are also doling out parking slots free of cost to attract customers.
| CROWD TURNOUT | |
| Year | Number |
| Apr-07 | 62,000 |
| Oct-07 | 79,000 |
| Apr-08 | 81,000 |
| Oct-08 | 85,000 |
More From This Section
Typically, the October-December period constitutes 60 per cent of developers’ sales and, to perk up sales, many property developers are already advertising 5-10 per cent price cuts and a waiver of stamp duty, which constitutes 5 per cent of the property value in many states, including Maharashtra. Mehta said the idea was to provide a platform for the prospective buyers with a large number of properties and developers under one roof. “You can see all properties and take a informed decision later,” he said.
However, property consultants say small attractions are not enough to lure buyers. “Buyers are pessimistic about current market conditions and not happy with 5-10 per cent discounts. In their view, the discounts should be 30-35 per cent,” said Sanjay Dutt, the deputy managing director of global consultancy Cushman & Wakefield.
Added Rajiv Sabharwal, head, retail assets, ICICI Bank, “I hope developers make it attractive enough to do transactions. There is an inherent demand for home loans, but buyers’ affordability is low. On the freebies doled out by developers, he said, “You do not know what will click with buyers. However, any discount is welcomed by consumers.”