Free­bies, dis­counts fail to spur home sales in Mum­bai

Hindustan Times (Patna) - Live - - Business - Nachiket Kelkar nachiket.kelkar@hin­dus­tan­times.com

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.

In­ven­tory is­sues

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