Developers Shower Offers for House Hunters in Mumbai
Land developers are now offering various incentives to prospective buyers in Mumbai. The offers are focused on boosting apartment sales as well as combating the problem of inventory build-up. While new projects are coming up, old ones are not selling, leading to inventory build-up. This has increased pressure on developers, leading to selling of properties through offers.
Offers vary from discounts on per square feet of the property and exemption from floor rise to offers such as the developer paying the stamp duty and registration fees (accounting for 4-10% of property cost) and paid holiday. Some other offers include free covered parking spaces, gold coins, developer paying electricity bills for a specific period, ready-made kitchens, air conditioners and zero development charges. Some developers are also offering ‘festive season offers’ to lure prospective buyers. The discount schemes are most witnessed by pockets of Mumbai, Navi Mumbai and some distant suburbs such as Panvel and Mira Road. Offers and discounts are being given depending on the developer’s capability and leverage.
The chairman of Confederation of Real Estate Developers Association of India (CREDAI) said that, though developers find it difficult to offer huge price cuts in property due to tight money market and substantially increasing construction costs, they are willing to negotiate deals with buyers. The offers and discounts negotiated depend on the scope and need of margin reduction. Some negotiated deals have seen offers of 10-15% discounts. Offers depend upon the income-level of the buyers and the range of flats.
For example, the Aqua Lodha project by Lodha developers has a price of Rs. 10,900 per sq-ft. The developer is offering a ready-to-move-in option with a discount of Rs. 700 per sq-ft. Similarly, the price of Grand Vista Apartments at Ulwe, Navi Mumbai, amounts to Rs. 5,100 per sq-ft. The developer is offering a discount of Rs. 350 off per sq-ft with zero brokerage. Another developer is offering a discount of Rs. 750 per sq-ft on a project on Mira Road with a lucky draw, which has a Maruti Swift Dzire as the first prize.
Offers just a temporary solution
While the schemes and offers boost sales temporarily, they would not help in the long run, said the executive director of Cushman and Wakefield. He said that, for properties to really sell, the prices of properties have to go down, especially in distant suburbs like Panvel and Navi Mumbai where property prices are going up despite sufficient supply. It was also observed that despite attractive offers, new home sales had fallen by 12% in the second quarter of this year in the Mumbai Metropolitan Region.
