Shanti Bala, who works as an HR manager for a Mumbai-based export house, got a familiar, yet unusual email last Sunday. Familiar because it was a referral mail like the ones she sends out to colleagues about vacancies in her firm. Unusual as it came from a city-based builder and read: “Refer a friend. If he buys our flat, we will give you a 10 gram gold coin.”
With no takers for nearly 6 lakh homes around the country – according to property research firm Liases Foras – and new projects still being launched, desperate builders are dangling festive season goodies to lure more buyers. Half of home sales every year happen during the three festival months.
Waiver of stamp duty, registration fees, broker or agent’s bills, a foreign trip to celebrate your new house, a sedan, air conditioners, furnishings and modular kitchens, worth several lakhs are all on offer. Two out of every three builders is offering a discount or a freebie.
NCR-based developer, Brys, is offering to host buyers at a five-star hotel for four years till the possession of their luxury apartment. A lucky winner could also drive away with a brand new Lamborghini.
“We are selling it at 17,000 per sq ft with the hotel stay or furniture. If you don’t want them, you can have it at 12,500 psf,” says Rahul Gaur, chairman of Brys group, which launched this luxury project in Noida almost a year ago.
“The sentiment across the country remains weak and nothing has changed in terms of business environment for sales and investments to pick up,” says Shishir Baijal, country head and managing director of Knight Frank.
Builders feel this Diwali is their one last chance – if buyers do not return to the market, they would have to slash prices. They are hoping the freebies will help sales grow by at least 20% during the festival.
Mantri Realty is giving 100 grams of gold on every booking between Navratri and Diwali for its projects in Mumbai. That, based on today’s gold prices, would mean a discount of 3 lakh. Rustomjee has launched a’rent back’ scheme for its Urbania project where the builder pays the buyers rent for two years.
Jain Group is giving away car parking worth 2 lakh free and also white goods worth 50,000 in its projects in Kolkata. In Nashik, Ekta World is waiving stamp duty and registration fee (6% of the agreement value).
Builders are looking to maximise sales and generate cash flows, says Alexander Moore, chief executive officer at property brokerage firm LJ Hooker India.
While there is some increase in sales this festive season, it is still way short of previous years. Builders will have to take some extraordinary steps,” says Samarjit Singh, managing director of IndiaHomes, a property broking firm.
Developers are holding upwards of 670 million sq ft in unsold residential space, according to property research firm Liases Foras.
Twenty two cities witnessed a decline in home prices in the April to June quarter, according to Residex, National Housing Bank’s housing index. Prices are expected to fall further, says NHB chairman RV Verma. “Developers are now willing to take a haircut on their margins,” he told ET last month. Marketing experts say freebies may help convert fence sitters. “This is a once in a lifetime decision. Freebies will only attract those who have already decided to buy,” says Abraham Koshy, professor of IIM – A.