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S. Shanker
Moumita Bakshi Chatterjee

Mumbai/ New Delhi Oct 5 The builder fraternity across the country appears to be banking on Diwali sales to change their fortunes.

Home prices that have been on the downside in select pockets across the country could spread over the entire spectrum if buyers continue to remain on a wait-and-watch mode.

Prices have become unaffordable as have home loans. Demand that began tapering off last year, has now been reduced to a trickle. Many builders concede that deals are few and too far apart to mention.

Traditionally, the festive season brings in over 25 per cent additional sales for the builders as people consider the period extremely auspicious.

Developers too reach out to buyers with schemes and freebies.

This time around, rather than waiting for the festive season, a number of builders, especially area specific ones in Mumbai and Delhi, have begun free offerings such as modular kitchen, furnishing and white goods a little ahead of the season. This is apart from free parking slots and bearing pre-EMI payments.

“Developers fear that given that the lingering sluggishness in the market, there could be tough times ahead if the sales does not pick up now.

“As a result, builders are putting attractive offers on the table to woo buyers — either through soft discounts such as waiving off the registration fee or bundling freebies with sales, and even price discounts,” said Mr Anuj Puri, Chairman and Country Head of the property consultancy firm, Jones Lang LaSalle Meghraj.

Mumbai builders appear to be wilting though none admit to it. While some such as Orbit Corporation, in a pre-emptive move decided to hold pre-sell rates for its Lower Parel project at 21,500 a sq ft, which is 15 per cent lower than the market rate of Rs 26,000 per sq ft.

“The last sale at the project happened in May at Rs 21,500 and we don’t see any reason to hike prices, though a few properties in the neighbourhood since then sold at Rs 26,000 levels,” said Mr Ramashrya Yadav, Head - Finance and Strategies, Orbit Corporation.

Mr Yadav believes that this festive season would determine whether the present prices would hold or fall. A 20 per cent drop is very much on the cards if developers don’t realise the numbers, he added.

While Delhi-based Ansal API is offering a discount of up to Rs 2 lakh in its ‘Megapolis Villa’ project at Greater Noida, another realtor Shri Group is dishing out a 10 per cent discount in one of its residential projects at Mathura, Uttar Pradesh.

Meanwhile, Ghaziabad-based SVP Group has introduced an EMI-holiday for its project at Mohan Nagar; and in another residential project at Ghaziabad the group is offering customers a flat discount of Rs 40 per sq ft.

“Investors and speculators have long exited the residential market, and whatever demand there is, is from end-users. Since end-users look for freebies and discounts while making purchase decisions, builders are betting big on Diwali offers this year to perk up sales,” said Mr Sunil Jindal, CEO, SVP Group.

There are others who offer free registration without stamp duty charges (about five per cent) for bookings during Dussera like Nirmal Lifestyle Ltd.

Sunil Mantri Realty Ltd said buyers could avail themselves of either the stamp duty offer or a five per cent launch discount.

The company did not give any such offer last year. All eyes are on what the Maharashtra Chamber of Housing Industry, a 500-member builder group, will unveil at its annual expo this month, between October 9 and 12.

More Stories on : Real Estate & Construction | Promotions & Offers

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