Developers offering huge discounts to lure buyers in a slow realty market

However, only completed projects at right price and location have sustained buyer interests especially in Delhi-NCR

Free office space with an apartment, free maintenance services, free package for summer holidays along with a maximum discount of Rs 21 lakh — these are among the schemes that developers have rolled out in Delhi-National Capital Region to attract buyers in a slow market.

This comes in the backdrop of a marginal increase in sales at six per cent across eight cities in the first quarter this year. However, only completed projects at the right pricing and location have sustained buyer interests especially in the Delhi-NCR market, according to experts.

There has been a mismatch in the demand-supply in the property market as developers are sitting on huge inventory. Over the last few years, the sales have come down significantly forcing developers to launch new schemes and offer discounts in various forms. Many developers say the market will only revive by next year as sales have started to improve, though only marginally.

“Despite stagnant prices, sales have not picked up well. Only in select locations, with few developers having backing of a big corporate house are able to sell their units,” a Mumbai-based consultant said.

A report by real estate research firm Liases Foras said the residential prices during January-March quarter remained flat in Mumbai while NCR saw a correction of three per cent from a year ago.

Outpacing growth in sales, the months inventory across the major eight cities stood at 42 months during January-March quarter, a rise of 13 per cent in one year. An efficient market maintains 8-­-12 months of inventory, which indicates downside pressure on price across all the major cities in India, according to the report. Anshuman Magazine, chairman and managing director, CBRE South Asia Pvt Ltd, says the residential market in the NCR continues to witness muted interest from home buyers.

“The potential housing demand continues to exist in the region but purchase decisions are increasingly being led by onground realities. Completed projects at the right pricing and in the right location have sustained buyer interest, as realistic delivery timelines and quality of construction have been driving demand in the NCR housing market,” Magazine said.

He also said property purchases at pre-launch and launch stages of projects have dried up to a large extent and because of low demand, developers have been reining in their plans of fresh project launches in the region, particularly for luxury projects.

Supertech CMD RK Arora said a revival is only expected in the next year though things have started to improve onground.

Reserve Bank of India (RBI) governor Raghuram Rajan last month had asked developers to reduce home prices to push up demand but developers have been saying there is no room for any price cut.

Moreover, there has been a trust deficit between developers and buyers after many developers went back on their commitments and delayed possession of residential units by several years. This has also led to a buyer activism in the real estate space.