DLF offers price cuts for housing project delays

Realty giant DLF has offered some sweeteners for the buyers of its new housing project at Gurgaon. In a first-of-its-kind move, the company wrote to people who had booked flats at its New Town Heights residential project, where construction is yet to start, of an amendment to its sale agreement. The change entitles customers to benefits that will work out to a price reduction, it says, of about 20 per cent.

The company has announced a 5 per cent discount over the basic sale price. It has also announced another 10 per cent timely-payment rebate. The changes also include an increase in the compensation rates for delays from Rs 5 per sq ft per month to Rs 10.

It has also rescheduled the payment plan. Now, instalments have been linked to various construction milestones. All payments received over and above 35 per cent of the sale price will thus be treated as advance payment, and a rebate equivalent to 13 per cent interest will be allowed to the customer.

The company said the move was in tune with its earlier announcement to cut the prices of residential projects by 15-20 per cent.

“We have been implementing the price correction on a project to project basis. Different models were worked out in cities like Chennai and Bangalore. In Hyderabad, reduced prices were announced. Each model reflects the price correction happening in specific cities,” Rajiv Talwar, group executive director, DLF said.

According to him, DLF’s attempt is to hold all existing clients, boost customer confidence and attract new customers, to ensure continued cash flow in the times of global recession. “We are trying to be responsive to the market,” he said.

Customers, however, said it wasn’t such a generous thing. Commenting on the 10 per cent timely payment rebate, they said the rebate was on 65 per cent of the total amount, as 35 per cent was always paid as advance. “This means the rebate is effectively 6 per cent and not 10 as claimed by DLF. When the total benefit may not be more than 11 per cent, how can the company claim to offer 20 per cent discount?” they asked.

The project-specific and city-specific plans also came under criticism. However, the customers agreed that the DLF move was not a legal compulsion but a goodwill gesture.

The move has generated interest among other players also. Delhi-based property developer, Omaxe, said the company was working out a similar offer for its Greater Noida customers.