If you are planning to buy a house any time soon, this may be the right time to start looking for one. Real estate companies have started rolling out offers, ranging from free international flights to gold coins to even cars, even before the festive season has begun.
With the real estate sector in a hurry to get rid of piling inventories in the next few months, the discount trend has caught on a couple of months ahead of schedule.
“It’s usually during the end of the year or the peak festive season that developers start showering a lot of offers and freebies. This year, by end of July, we are already seeing a lot of them coming up with offers and gifts," said Ashutosh Limaye, research head, JLL India.
Experts say this is an indication of the underlying stress that real estate firms are facing. Property consultant Knight Frank has warned that if developers are not able to clear some of their piled up stocks by year-end, the sector may head for ‘turmoil’ by 2016. According to a report released by the firm, around 700,000 homes are lying unsold in top eight cities with Mumbai and Delhi being the worst-hit markets in the last six months.
Tata Group’s real estate firm Tata Housing, which recently opened its office in Dubai, has introduced a scheme limited offer ‘Happy Returns’ for non-resident Indians (NRIs). Under the scheme, the company is offering 72,000-1,000,000 Jet privilege miles to customers on purchase of a home in any of its housing projects across India. Customers can redeem these points against air tickets on Jet Airways.
At present, NRIs contribute about 15-20% to Tata Housing’s total sales. The company expects to increase the overseas sales contribution to 30% in the next three years.
Similar offers have been lined up by some other builders, particularly in the national capital region which has around 180,000 unsold units. For instance, Noida-based SSC Builders is offering free international flights to customers who buy houses at its upcoming project, SCC Sapphire. Alternatively, buyers can opt for complete wood work worth around ₹ 1 lakh.
Other offers include branded air-conditioners, modular kitchens, four-wheelers, free car park space and gold coins for booking a house.
Mumbai-based realtors are not far behind in showering offers to potential customers. A few local property developers are offering Hyundai i10 or Eon cars on purchase of two-or three-bedroom apartments in some premium projects.
Most of these offers are available as exclusive deals on real estate portals like Magicbricks or 99acres.
Instead of freebies, established builders like Godrej Properties and House of Hiranandani are offering discounts and easy financing schemes. For instance, both these companies have waived off floor rise charges for some of their residential projects. Floor rise charges are the premium charged by developers if a customer buys the upper storeys in a building.
Industry experts are skeptical that such marketing gimmicks will attract new home buyers, but said it does help in winning over or negotiating with potential buyers.
“Such initiatives of giving away gifts and offers do not help in getting new buyers. However, for people who are most likely to buy, such offers help in making their decisions towards a particular project or developer," Limaye said.