Go on­line, pay later: buy­ers get spe­cial builder of­fers

Com­pen­sa­tion for price corrections also be­ing promised

HT Estates - - FRONT PAGE - Van­dana Ram­nani

Hit hard by de­mon­eti­sa­tion, real es­tate builders are now com­ing up with spe­cial schemes to lure buy­ers and en­cour­ag­ing on­line pay­ments. Com­pen­sa­tion is also be­ing promised for price corrections in the near fu­ture.

H o m e b u ye r s a r e b e i n g as­sured of ad­just­ment of com­pen­sa­tion if prices fall fur­ther. This has led to a sig­nif­i­cant rise in in­ter­est in ready- to­move-in prop­er­ties and projects near­ing com­ple­tion, says Brotin Ban­er­jee, MD and CEO, Tata Hous­ing.

“We have also en­cour­aged the use of the most con­ve­nient mech­a­nisms for trans­ac­tions through our on­line por­tal which al­lows cus­tomers to make pay­ments on­line, en­sur­ing trans­parency and ease for both,” Ban­er­jee says.

In Delhi NCR some de­vel­op­ers are plan­ning to pro­vide price guar­an­tees which will be in­cluded as a clause in the builder-buyer agree­ment. If prop­erty prices were to cor­rect, the bal­ance would ei­ther be re­turned to the buy­ers or ad­justed in their in­stall­ments. Realty ex­perts, how­ever, warn buy­ers about this mea­sure, ask­ing “How will you mea­sure cor­rec­tion? What is the cri­te­ria and how can the same value be true for all ci­ties and all as­set classes?”

D e v e l o p e r s w h o h av e in­tro­duced the book now, pay af­ter three months in­clude Delhi In­frat­ech. It has al­lowed buy­ers hit by de­mon­eti­sa­tion to book apart­ments in its lux­ury project DeNest on the Gur­gaon-Farid­abad Ex­press­way and pay later.

It has also been re­ported that some builders, es­pe­cially those with huge un­sold in­ven­tory, have been ac­cept­ing old cur­rency notes from buy­ers to re­pay debts. Many lo­cal builders have man­aged to set­tle their old debts in this way. Sim­i­larly, broking firms are re­port­edly book­ing prop­er­ties with old cur­rency to pay off sums they owe as com­mis­sions to sub bro­kers, say sources.

Buy­ers are also be­ing en­cour­aged to trans­fer the book­ing amount for prop­er­ties on­line. PayU­money has part­nered with An­sal Builders for pay­ment of book­ing and util­ity costs. “Eight to 10 builders are live on our plat­form,” says Pradeep Shekhawat, head-SMB Busi­ness, PayU In­dia.

What could prob­a­bly work bet­ter at this junc­ture is for de­vel­op­ers to of­fer re­bates for timely pay­ment of EMIs to cus­tomers. Af­ter the hous­ing bub­ble cri­sis in 2007-2009, many de­vel­op­ers of­fered 5%-10% dis­counts on the over­all cost of the prod­uct and ad­justed the dis­count with the last pay­ment. “That is a bet­ter way to ad­dress the cur­rent mar­ket sit­u­a­tion and will help en­cour­age sales,” says Shveta Jain of Cush­man & Wake­field.

H av i n g s a i d that, the un­cer­tainty in the mar­ket is only tem­po­rary. “Right now it is more a func­tion of un­cer­tainty in the mar­ket and buy­ers adopt­ing a wait and watch ap­proach. The sit­u­a­tion is ex­pected to ease by March next year,” she says.

Are hous­ing deals ma­te­ri­al­is­ing post de­mon­eti­sa­tion? Most all-cheque trans­ac­tions in the pipe­line be­fore Novem­ber 8 have more or less con­cluded. Ma­jor­ity of cash trans­ac­tions, how­ever, have failed to ma­te­ri­alise due to un­cer­tainty in the mar­ket.

Primary mar­kets are most of the time driven by all-cheque and all loan trans­ac­tions. An af­ford­able, well priced prod­uct still has trac­tion in the mar­ket. Many po­ten­tial buy­ers are opt­ing to wait for big dis­counts be­cause of low de­mand. For many buy­ers, the joy of re­ceiv­ing pos­ses­sion of their homes is fast turn­ing to dis­may as they can­not rus­tle up the fi­nances for re­lo­ca­tion – that too in cash. Some builders are cit­ing de­mon­eti­sa­tion and the sub­se­quent labour crunch as rea­sons for de­lay in projects.

San­tosh Ku­mar, who re­ceived de­liv­ery of his Greater Noida West apart­ment ear­lier this month, says he can­not move in be­fore April as he does not have cash for the movers and other ex­penses. His project is one of the many hous­ing so­ci­eties where even though 1,300 peo­ple have reg­is­tered their apart­ments, only 500 peo­ple have moved in.

Sh­weta Bharti, gen­eral sec­re­tary, Noida Ex­ten­sion Flat Own­ers Wel­fare As­so­ci­a­tion also con­firms that some de­vel­op­ers are cit­ing de­mon­eti­sa­tion to jus­tify the slow­down in work and late de­liv­ery of projects – but orally. No let­ters have been sent to buy­ers. “When­ever we visit the con­struc­tion site and in­quire about the progress in work, we are told that the cash crunch and lack of labour has de­layed work,” says a buyer.

Out of 50,000 houses that we r e t o b e d e l i ve r e d by end of this year in Greater Noida West, only 12,000 have been handed over for mally.

Unor­gan­ised labour from Bi­har and Mad­hya Pradesh hired by de­vel­op­ers on a short term ba­sis have gone back to their states due to the cash crunch. Usu­ally, a project site has 15% per­ma­nent labour­ers. About 85% tem­po­rary labour­ers. most of whom do not have bank ac­counts, have gone back. This has had an im­pact on project con­struc­tion and led to de­lay in de­liv­ery of projects, says Praveen Jain, pres­i­dent of Naredco.

A m i t M o d i , wh o l e t i m e di­rec­tor ABA Corp and vice pres­i­dent, Credai Wester n UP, says that there has been a 25% l abour short­age. His com­pany has taken the ini­tia­tive to open bank ac­counts for work­ers and even de­cided to pro­vide them daily meals.

“B u i l d e r s we r e u n d e r pres­sure to com­plete projects be­fore the real es­tate reg­u­la­tor is put in place across states and were hop­ing to com­plete them by Fe­bru­ary next year, but de­mon­eti­sa­tion will lead to fur­ther de­lays. If projects were de­layed by a year to three years ear­lier, they will be fur­ther de­layed by six months to a year due to cash flow is­sues,” Jain adds.

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