Giving out gifts or freebies during the festive season has been the norm for most developers in India, particularly residential ones, for quite some time. This year is no different, except that it is the first Navratri/Diwali season after the Real Estate (Regulation and Development) Act, 2016 (RERA) and the Goods and Services Tax (GST) really set in. At this time last year, both the Act and the tax regime were still in their teething stages.
This is also a time when trust deficit between buyers and builders is quite high, thanks largely due to the Jaypee Group and Amrapali cases. In such an environment, most developers are going all out to woo buyers, which explains the GST waivers and the numerous assurances to buyers that their projects are RERA-certified and are being sold on carpet area basis.
While white goods such as air conditioners, refrigerators, fitted-out modular kitchens and wardrobes continue to be popular freebies, this year, builders are also have complimentary registration or waiver of stamp duty fees, flexi-payment plans, EMI-free periods and GST waivers on the table.
What choices do buyers have?
Buyers are increasingly opting for RERA-compliant ready-to-move-in units, or those that are that are almost up for possession at the very least.
As far as under-construction projects are concerned, experts say there is still confusion about GST. People are also apprehensive about under-construction projects because they are unsure if the project will get completed on time. This is largely due to the scores of delayed and unfinished real estate projects in the market and legal cases involving them that the Supreme Court or the NCLT is currently hearing.
All in all, this is still a buyers' market. Investors have more or less vanished. As per data provided by ANAROCK, the overall unsold stock across the top 7 cities as at the end of September was 7,00,800 units, 10 percent less year on year. The resale market is flush with inventory as well. The data reveals that users are exercising caution and not making impulse purchases. They are checking every fact and negotiating hard.
Positive consumer sentiment, backed by various reformatory changes, is what is keeping the market afloat. There have been a few new launches across the country and as per data, nearly 30,840 new units have already been added in July and August across the top 7 cities in the country. Mumbai Metropolitan Region and Bengaluru led the pack with nearly 13,570 units and 6,000 new units, respectively.
With RERA guidelines and completion deadlines looming large, only the most financially-sound builders are venturing into new projects at this stage and they are primarily focused on budget homes. ANAROCK's Anuj Puri says luxury homes and even semi-luxury ones continue to languish. Most new launches are in the affordable housing segment. Data reveals that out of all the newly launched units in the top 7 cities between January and August, nearly 39 percent belonged to the affordable segment (< Rs 40 lakh), followed by 34 percent in the mid segment (Rs 40 lakh - Rs 80 lakh). Sizes too have been reworked.
"In the last one years prices have corrected and the realty market has started to somewhat revive. With festive season coming up, developers will dole out discounts, finance schemes and freebies to push housing demand further. We continue to see strong traction for ready to move in and nearing completion projects to attract demand," says Samir Jasuja, Founder and Managing Director at PropEquity.
Should buyers jump the gun?
Prospective homebuyers should carefully study the offers. While GST, waiver of stamp duty/registration fees and free parking make sense, freebies in the form of white goods only make sense if the property itself is of inherent value to the buyer. Buyers should also make sure that the property is habitable and the location has a social infrastructure in place.
If a developer is offering discounts, buyers should make sure they check what they actually save, compare the current price with what was being offered by the builder a few months ago and then take a call. Finally, they should not make a decision based on the discount but on whether the property suits their needs – the budget, the location, the size and infrastructure. They should also not forget to check if it the property is RERA-compliant and whether it meets quality checks.
"Buy a house only if it is for self-use. It is a buyers market today. Sizes of apartments in almost all new launches have been rationalized to suit demand. 2BHK in Delhi NCR market and 1 BHK in Mumbai are popular formats. Many builders are offering composite prices," says Pankaj Kapoor of Liases Foras.
Most developers have realised that there is demand at the base and are therefore offering lower-ticket sizes. Builders are coming up with compact-sized homes as this is the market that will be sustainable in the long run, opines Samantak Das, Chief Economist and Head of Research, JLL India.
Some freebies on offer
In Noida, Ajnara India is offering a scheme wherein buyers can book a flat in its Greater Noida project, Ajnara Olive Greens, by paying Rs 31,000. TDI Infracorp is offering a discount of up to Rs 9 lakh on every booking in its Kundli project TDI LakeGrove. SG Estates is offering free registry for its project SG Oasis.
Paradigm Realty in Mumbai is offering a Rs 3-9 lakh spot discount for its projects in Thane, Borivali and Oshiwara. Another developer, EKTA World, is offering a GST waiver for its project EktaInvictus in Dadar and Ekta Parksville in Virar.
Follow: vandana.ramnani@nw18.com
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