Buy a flat and get a Merc or BMW free
Peril sharpens the mind, is an aphorism we are familiar with. With sales touching a nadir, real estate developers are brimming with ideas of schemes to lure home buyers.
After failing to attract buyers with necessities and other amenities, developers, especially in north India, are now offering luxury freebies such as a Mercedes, BMW or gold medallions.
The idea is to ward off the the dip seen in sales in both premium and mid segments.
What is more, the fear of distress sales that might occur in six months’ time, an upshot of low sales, has triggered off a panic attack among developers.
The schemes could not have come at a better time. For the last one year, the home market has witnessed a high cost in home loans that has been compounded by a dip in demand from non-residential Indians and the general liquidity crunch.
The high rate of inflation and the exhorbitant prices are compelling buyers to shy away from investing. Everyone seems to be in a wait-and-watch situation.
It is the opinion of some investment firms that India’s realty woes began much before the current economic slump.
Developers blame the high home-loan rates. Investors blame the developers for keeping prices high.
Almost 90 per cent of home-buyers take the home loan route. As home-loan interest rates shot up, potential buyers also kept away.
Developers are also finding it increasingly hard to source land at reasonable prices.
Some developers are of the opinion that demand for housing hasn’t declined. They feel that most investors are flush with disposable incomes and waiting to just park their money in a good project that could offer returns in the long term.
Investors, on the other hand, are waiting for prices to fall to reasonable levels before investing. Meanwhile, other opportunities continue to hold them in good stead.
In places like Lucknow and Meerut, developers have brought down prices to reasonable leves and are quoting Rs40 lakhs for mid segment housing. Maybe the freebies might just work wonders and bring on a change of heart among the investor community.