Freebies, discounts fail to spur home sales in Mumbai
Hurt by slow sales and rising inventories, residential real estate developers are trying all possible promotional and marketing tactics — from discounts to low down payments and gifts and freebies — to lure buyers this festival season. However, there has not been any significant uptick in sales so far.
Sales have been slow as buyers are postponing their decision hoping for a further cut in interest rates. Home loan rates are at an average 9.55% following the 50 basis point cut by the Reserve Bank of India in September.
One of the leading developers in Mumbai is offering discount of as much as `25 lakh if one books a flat at one of its residential projects in suburban Thane. Another developer has less than halved the booking amount from earlier `7 lakh to only `2.50 lakh. In suburban Thane, at a premium project, buyers can book a `1.40-crore flat for just `7-8 lakh, with the rest payable after possession.
“In times of sluggish demand, the right combination of stimuli given to customers is key in creating new inflections,” said Samujjwal Ghosh, executive vice-president, marketing, Lodha Group.
Though sales are on the rise, fireworks will take some more time, deveopers said. Sales have gone up by 10%, lower than the 25-30% growth typically seen during the festival season.
“There are definitely some signs of sales. People are coming forward for good deals, but things are still not as great as earlier,” said Manju Yagnik, vicechairperson of Nahar Group.
According to realty consultant Knight Frank, in the first half of 2015, there were almost 700,000 unsold units in eight major cities and it would take almost three years to exhaust the inventory. Mumbai accounted for almost 30% of these unsold homes.
“Things are slightly better now, but there is no big bounce back yet,” said Mudassir Zaidi, national director, residential at Knight Frank. Residential real estate market is likely to see slow recovery in top cities, he added.