In an effort to step up sales, several Mumbai-based real estate developers are offering schemes and discounts to buyers. These are in the form of price cuts, flexible payment plans or other freebies. This has also helped in improving sales in the Jan-Mar 2013 quarter.
RNA Corp had slashed rates at its Exotica Project in Goregaon from Rs 11,750 per sq ft to Rs 9,950 per sq ft. An official associated with the company said it has sold all the units at Exotica.
Nahar Group that recently launched two luxury apart¬ment projects – Burberry and Bryony – at Nahar’s Amrit Shakti, the group’s flagship project located at Chandivili near Pawai, has tied up with HDFC Bank for special scheme on home loans. As per this scheme, customers are required to pay only 30 per cent of the cost of the apartment at the time of booking and start paying the balance 70 per cent in equated monthly instalments (EMIs) only after possession.
All these schemes translate into a discount on the quoted price. “New project launches at attractive prices, discounts and schemes attract buyers and launches by renowned developer brands resulted in pick-up in sales during the period (Jan-Mar 2013),” says a report authored by Abhishek Kiran Gupta, Real Estate Analyst at Bank of America Merrill Lynch. The two rate cuts by RBI in the Jan-Mar 2013 period has also helped developers to achieve higher sales. Developers at their end too, are trying to come up with some schemes to ease the purchase for buyers.
Builders have not officially cut base prices but they are resorting to several discount schemes and freebies to push sales. They are offering discounts through 20:80 schemes, stamp duty waivers, floor rise waivers and other freebies. The 20:80 model is where the buyer pays up to 20 per cent of the entire amount as advance, while the rest is paid only when the flat is ready. Freebies, Gupta admits, only provide a feel-good factor. “However, a 20:80 scheme does translate into a nearly 8-10 per cent benefit on prices over a three-year period.”
A Knight Frank survey conducted in June 2012 had estimated that Mumbai real estate market had an unsold inventory of 80,000 units worth approximately Rs 105,000 crore, implying the average unit size of Rs 1.31 crore.
Time will tell how the recent moves by developers to offer freebies and discounts help them in clearing the unsold inventory and strengthening the cash flow. But as of now this is certainly a cause to cheer for the buyers.
Ajay Modi, MagicBricks.com Bureau