The Reserve Bank of India's fifth consecutive rate cut and the government's Rs 20,000 crore stress fund for the realty space and cut in the corporate tax rate would help improve consumer sentiment this festive season.
In fact, several developers across the country are doling out discounts and freebies to offload their unsold units. Offers range from waivers on the Goods & Service Tax (GST) and stamp duty to the usual discounts on basic selling price, free coins, modular kitchens, electronic appliances to even free cars and virtual cash.
Buyers looking to buy a house this Navratri should understand that today’s market is a buyer’s market, experts said. Not only are developers offering deals and discounts, buyers are in a great position to bargain hard and gain significantly. Discounts could vary from 15 percent to even 30 percent.
Pankaj Kapoor, founder and Managing Director, Liases Foras, said builders are under pressure to sell and would have to generate cash flows through customer advances. In that respect, he feels this Diwali is not a sellers Diwali but a homebuyers' Diwali.
Besides the above listed positives, Siva Krishnan, MD - Residential Services, Developer Solutions and Strategic Consulting, JLL India, cited falling interest rates and huge supply of affordable and mid-income housing across top cities as reasons to buy a property this festive season. "Given the current market scenario, buyers can avail of a additional 15-20 percent discount on the marketed price. In certain cases, discounts have touched 30 percent,” he said.
So, what's on offer this festive season?
Cash discounts are being offered on the per square feet price. For instance, on the brochure rate of Rs 4,000/sq ft, a cash discount of Rs 200 is offered. On a 1,000 sq ft apartment, this works out to Rs 2 lakh.
Freebies such as air conditioners, television sets, furniture, modular kitchens, zero maintenance and club membership, gold coins and IPhones are also being offered.
A GST waiver is also being offered by developers. At present, GST is charged at five percent for residential units outside the affordable housing segment. At the time of registration, the buyer has to pay stamp duty and registration charges. While stamp duty varies from 3-10 percent depending on the state, registration charges work out to 1.1 percent on a property worth over Rs 25 lakh. Along with GST, many developers are waiving off stamp duty and registration charges, which mean further savings for the buyer.
Mumbai-based House of Hiranandani has tied up with reputed décor brands and is offering a home décor scheme to buyers.
Eros Group is offering a 20:20 payment plan; free power back-up, open car parking, modular kitchen, one-year maintenance and community membership; wardrobes in each bedroom; ceiling fans; chimney; power backup; and lease rent.
Mumbai-based Spenta Corporation Pvt is offering assured rent for projects that are to be delivered by 2022. An assured rent of Rs 50,000 on a 2BHK and Rs 70,000 on a 3BHK are being offered to buyers each month until they receive keys to their home.
NCR-based Mahagun Group is offering a GST waiver, free car parking, modular kitchen and hotel or club membership on some of its projects.
Saya Group is offering special payment plans. In Saya Gold Avenue, buyers can book a flat by paying only 30 percent of the total price, 20 percent at the time of applying for OC and 50 percent at the time of possession.
Bhutani Group, a commercial segment developer based out of Noida, has a few offers lined up on its projects Cyberthum and Grandthum. On booking two MY POD units, retail and anchor spaces at Cyberthum, a buyer stands a chance to win a 40-inch LED TV, an Apple iPhone 10 and an Apple iPad. On booking a office space at Grandthum, a customer can win a 55-inch LED TV.
Spectrum Metro has organised a lucky draw where a buyer gets a chance to win a Mercedes Benz along with an assured gift up to Rs 1 lakh on every booking.
Avanta Business Center has launched a special offer wherein the company will waive two months' rent provided a customer books office space for a year. This effectively means a customer pays rent only for 10 months.
Aditya Developers is offering ready-to-move-in flats at a discount of 15 percent and rentals up to Rs 25,000 per month on a 3 BHK unit.
Last month, Bengaluru-based Puravankara introduced a virtual real estate currency for homebuyers planning to book housing units. Buyers can redeem points up to Rs 5 lakh against any of its Provident projects located in Bengaluru, Chennai, Kochi, Pune, Hyderabad, Goa and Mangalore.
What should homebuyers keep in mind? If a homebuyer is being offered a freebie that he already owns or does not need, he can opt for other discounts. For instance, if a developer has offered ACs in two rooms and hall in a 2BHK apartment, one can instead seek a reduction of a lakh from the total outgo. However, Krishnan advises buyers to get a fix on how these freebies translate monetarily.
Homebuyers should also understand that there has been a slump in the market. Huge unsold inventory has forced firms to not increase their rates. As a result, prices are trading sideways. With fewer launches, the market is ready for homebuyers willing to buy.
Unsold inventory during the first nine months of 2019 was 444,673 units, a small drop as compared to the corresponding period in 2018. While there has been a revival of sorts in sales since 2018, developers are still not out of the woods.
Choose wisely, bargain hard Implementation of RERA ensures timely completion. While ready-to-move-in properties are safe bets, picking up a property in one of the under-construction projects can also be a good choice.
The reforms and policy initiatives so far indicate that market is likely to see more deliveries in near future. So, choose wisely and bargain hard, Krishnan stated.
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