Better sense seems to have prevailed upon realty firms of the NCR, as they have finally begun offering easy and flexible payment plans to their customers to buy houses. They feel that this is the only way they can clear their mounting inventories.
After stubbornly holding on to high prices for years in the face of sluggish sales, crippling liquidity crunch, and rising costs developers have finally come round to the fact that but for offering comfortable payment plans to prospective customers, they have no chance of survival.
They are also ready to negotiate with their customers on cost. Hence, they are going all out to woo their customers with novel schemes. For instance, CHD Developers is offering various incentives and attractive schemes to customers. “We offer construction incentive to our buyers at our CHD City in Karnal. Apart from that we are also offering a construction incentive to those who book plots. We also offer referral incentives to our customers; buyers are offered incentives and gifts for referring our project to other prospective buyers. We feel that advertisement through word of mouth is the best reward we can get from our satisfied consumers,” Ravi Saund, COO of CHD Developers Ltd, says.
Nuzhat Alim, executive director of ILD Group, says: “The liquidity crunch is forcing builders like us to reduce prices, offer various schemes in order to clear inventory. I expect more and more builders to come up with schemes to woo customers. It is also possible that some builders will drop the prices to some extent.”
Nikhil Jain, CEO of Ramprastha Developers, says: “All our earlier projects have been sold out and thankfully we do not have to worry about inventory. And even in our recently-launched Primera project, we have not offered the 20:80 payment scheme, and yet we are getting very good response.”
Parsvnath Group has launched ’25:75 house of happiness scheme’. This scheme is applicable on 20 of their projects in New Delhi, Greater Noida, Ghaziabad, Sonipat and Dharuhera. A spokesman of Parsvnath said they were getting good response from first-time buyers.
Sunil Jindal, CEO of SVP Developers, says: “We will soon launch a ’50-50 scheme’ in phase II of our Gulmohur Garden project where the customer has to pay 50% on booking and the rest on possession. The project is under construction and we have already built a couple of floors.”
In such schemes, developers settle for 20-30% from their customers and are ready to wait for the remaining sum if the buyer is ready to pay this amount upfront. Some realtors say that the market leader DLF has also received positive response to its 20:80 scheme.
“The latest round of wooing by realty players clearly proves the fact that they are worried about their piling inventories. It is good that they are getting positive response to their latest mission,” Devinder Gupta, managing director of Century 21 DGS, says.
Experts say that the Delhi-NCR residential market has an estimated 1.20 lakh units in unsold inventory. Of course, it is a staggering number and realty players would like to see their inventory reduce fast. They would be in big trouble if they fail to clear the swelling inventory.
Then, there are some builders who are offering sops of a different kind. Ajay Singhal, director of Avalon Developers, says: “Once a customer applies for a loan for a flat that is under construction, for 21 months of the loan period, the customer need not pay any pre-EMIs. We will pay all the interest for these first 21 months. So, basically you own a property without having to pay any interest for 21 months. This scheme is a win-win situation for both developers and buyers.”
“Developers are under tremendous margin pressures. If they do not offer friendly schemes, they will be out of the market. Therefore, we have to offer schemes on a regular basis so that buyers do not ignore us,” Sanjay Khanna, director of Kailash Nath Projects, says. “The state of the nation’s economy, too, has a bearing on realty world; customers are not coming in the numbers they used to before the market slowdown,” Khanna says.
Some major builders of Mumbai have either cut prices or introduced flexible pricing within a single project, or launched innovative schemes which have enticed buyers to cough up large sums to book properties even before the project enters the construction stage.
While many builders may not be announcing price cuts upfront yet, it is no secret that they all are now willing to negotiate with buyers.