Developers targeting high-end property buyers... but will it work?
There’s a gap between buyers’ expectations and what the developers plan to offer them this year, says a Makaan.com report
The festive season starts with Ganesh Chaturthi and is followed by Navratra, Durga Puja, Dussehra and reaches its peak around the festival of lights – Diwali. The property market in India traditionally witnesses higher property transactions during this season.
The overall mood among homebuyers is upbeat, with a majority 64% keen to finalise a property deal during the next 100 days. As many as 61% homebuyers are looking forward to plenty of new property launches during the festive season. There seem to be more people wanting to finalise deals this year as compared to last year, when just 52% had expressed their willingness to buy property. This is a positive change, says a report by Makaan.com, titled Festive Reality 2012 – Home buyers’ expectations from the festive season.
When it comes to the budget, 71% of home buyers are on the lookout for houses in the affordable category, with a budget of under R40 lakh, whereas 19% are looking for housing in the mid-segment ( R40 lakh to R75 lakh). The remaining 10% are looking for homes in the high-end and luxury category within the budge of R75 lakh to R1.25 crore, respectively.
Homebuyers are looking forward to schemes and freebies from developers during the festive season. As many as 62% of the respondents (almost the same percentage wanting to buy property) are expecting developers to offer freebies and discounts equivalent to or more than 5% of the home value whereas another 20% are looking for a discount in the range of 2% to 5%. According to them, discounts help them arrive at a final decision. As many as 39% buyers are looking forward to a property purchase in the metropolis area while 36% are okay with the suburbs. Only 18% said that they may consider tier-two cities for a house.
Developers are taking a more conscious approach to this festive season. As many as 36% of them are looking forward to less than five launches nationally during next 100 days. Another 29% are considering five to 10 new launches to capitalise on the festive season. Almost 45% of the developers are launching projects in the affordable housing segment while another 32% will be introducing new projects in the midsegment. The remaining 23% launches are likely to be in the high-end and luxury segments. While most of the developers have made up their minds to offer discounts and freebies to attract buyers, the quantum of discount varies from developer to developer. Only a fifth of the developers are considering 5% or more discount. As many as 29% developers are willing to offer discounts in the range of two to 5% whereas a majority of 32% are planning discounts in the range of 0 to 2%. The balance 18% have decided not to offer any discounts. These are primarily developers who are active in the affordable housing segment.
What are the trends like?
While people seem optimistic, one is not likely to see a meaningful jump in transactions on ground. Homebuyers seem upbeat compared to last year but their sprits are fuelled by high expectations from developers. Currently there seems to be a gap between buyers’ expectations and corresponding commitment from developers. This may play spoilsport. While buyers are expecting new launches in the under R40 lakh category and at a discount of around or more than 5%, the supply in this range is limited and there are fewer discounts on offer. While developers are willing to offer higher discounts in the high-end category, the demand in this category is low. All this may lead to a rise in the number of enquiries, field visits but may not witness conversions.