Just make sure you get your math right while striking a deal for a house this Diwali. Often times, the cost of the offer is built into the price of the property
Buying a home is one of the biggest financial decisions one takes in life. People wait for propitious times to buy their dream homes and nothing beats the auspiciousness of the festive season, which starts with Navratri and ends with Diwali. Buying a home during this period is said to bring good fortune, prosperity and wellbeing for the family.
With demand from actual end-users to buy their home, developers are doing everything to cash in on this sentiment with festive discounts, which are basically deal sweeteners that often provide financial cushioning, on-the-spot discounts at exhibitions, waivers on stamp duty, gold coins with every booking, and such like.
“Today there is overall bullishness in the market. We are at the cusp of a long upcycle in residential real estate and this year’s festive sales are expected to be better than ever,” says Dhruv Agarwala, Co-Founder, PropTiger. “People have realised the importance of home ownership and one must not expect irrational discounting. But developers are aware that this is the best quarter of the year and want to give a feel-good factor, converting the fence-sitters into homebuyers with attractive offers. Most major developers from Mumbai, NCR, Hyderabad, Bengaluru have festive offers. One can hope to get anything from a 2-5 per cent discount around this time which is substantial.”
The value of home ownership for the safety, stability and security it provides to the family has been reinforced during the pandemic. Says Niranjan Hiranandani, MD, Hiranandani Group, “Segments like new millennials who are traditional renters have turned ‘first home buyers’ while those in existing homes are upgrading to bigger ones-–and ‘fence sitters’ are turning into actual buyers.”
In Mumbai, Runwal group is offering a waiver on stamp duty for its Runwal Gardens project, no floor-rise cost (normally, as you go higher, you pay a PLC or preferred location charge). In NCR, the Signature group is offering gold coins with each booking. Others aren’t offering discounts but allowing zero EMI facilities for up to a year.
Almost every developer, whether Grade A or Grade B, has been running various schemes throughout the year, says Subhankar Mitra, Managing Director–Advisory Services, Colliers India. “Around the festive season, developers make their offerings look very attractive. For example, Prestige group has been successfully running festive schemes that have managed to generate 600-700 bookings, as per market sources. Ditto with other big developers such as Mumbai-based Lodha, Runwal, Wadhwa, Seth Group. In North India, developers like Gaur, Gulshan Group and Mahagun have launched promotional offers.”
Do the end users actually wait for Diwali to buy their dream home? Says Hiranandani: “Home buyers largely fall into two categories–traditional or cosmopolitan. The second category looks at a good deal and isn’t concerned about auspiciousness and other things while buying a home. The traditional-minded tend to follow perceptions of auspiciousness, bad luck, and so on. This segment opts for completing the transaction on a so-called auspicious occasion. It is enhancing customer delight which leads us to honour such transactions.”
At Hiranandani’s Powai project, there is a no-GST offer, while at Solitaire Studio in Hiranandani Estate, the festive offer is zero EMI for a year, with a ‘pay 20 per cent now’ rider. At One Hiranandani Park, in Fairway and Cloverdale, the ‘Grab the Deal Season 2.0’ translates into savings of up to Rs 11.46 lakh for select apartments.
The festive season always sees a marked uptick in enquiries. The NCR market is expected to see nearly 16,000 new units in the festive quarter with a growth of more than 50 per cent over H1 of 2021. Says Ashish Sarin, CEO, Alpha Corp: “We are confident that this festive mood will immensely boost sales and enquiries, in a scenario of rising consumer confidence, vaccination drives, and most importantly, the increased focus on the importance of owning a home.”
Mapsko is witnessing a significant increase in customer queries for Mapsko MountVille. Says Rahul Singla, Director, Mapsko Group, “We are geared up for the festive season and are willing to go the extra mile for our patrons to ensure a superior experience. We are offering discounts of up to Rs 7 lakh depending on the property, a special discount on festivals and spin-the-wheel for an on-the-spot discount for a limited period.”
Developers like Krisumi are giving away a complimentary golf session at ITC’s Country Club & Resort, a gold voucher worth Rs 2 lakh, an ITC gift voucher for a limited period, on every home booked at Krisumi Waterfall Residences in Sector 36A Gurgaon.
In the commercial segment, M3M is providing pre-leased investment opportunities with nine-year leases, and three-year lock-in period, in its mixed-use developments at M3M CornerWalk, in Southern Peripheral Road (SPR) that it has just delivered.
Where is the traction?
Today’s homes will be in sync with the ‘new normal’, inclusive of smart home automation with efficient layouts, flexi modular interiors, sustainable and open spaces attributes in a holistic ecosystem for better connectivity and convenience. This holds true across geographies, micro-markets and price segments. And the focus is on low-rise. Says Pankaj Bansal, Director, M3M: “This festive season, M3M is going to delight the market with a premium residential offering, in line with the current needs of the customers. We have planned low-rise developments (2.5 bhk and 3.5 bhk), with all the benefits of a condominium–a low-rise format with security, open landscaped terraces, and new-age tech.”
With a surfeit of offers in the market, how does a customer decide which one to go ahead with. One can check out property exhibitions and events where channel partners tend to help the buyer wade through these innumerable offers. Take the case offline property event “Right To Home” by PropTiger.com held in top eight real estate markets of the country by partnering with over 100 builders showcasing RERA-approved projects, including on-the-spot discount offers, tailor-made payment plans, GST and stamp duty waivers on bookings and home loan assistance etc. Says PropTiger’s Agarwala, “Builders who participate in our event not only give you discounts mentioned on their websites but will also give you on-the-spot discounts for a limited period. There are various ways in which each developer does it–-ultimately the smart thing is for one to do the math and see how much it effectively boils down to in terms of the number.”
Is a festive deal a big deal
What do homebuyers want? Says Colliers’ Mitra: “Most home buyers prefer any kind of financial offer. It may include direct discount, attractive payment terms, waiver of stamp duty, registration, or GST charges. Subsidised pre-EMI charges also appeal to the average homebuyer. However, in many cases developers don’t want to make a direct discount, as they intend to hold on to a particular price point. So they offer indirect subsidies by way of value addition and free products and services. Some of it may or may not attract home buyers.”
Homebuyers’ preferences vary from case to case but they look generally for better property pricing. While festive seasons come with a variety of offers for the buyers, customers should evaluate and factor all the offerings in the net price. Interiors are often preference-oriented, which is why builders refrain from offering fully-furnished property to customers. Says Zulquer Nain, VP–New Modern Buildwell Pvt Ltd, REPL: “We have observed that all-inclusive deals work well with buyers. These deals often include all other costs over and above the cost of property such as paid parking, external electrification charges (EEC), fire-fighting charges (FFC), and club membership. The market response to such festive deals is phenomenal.”
Avoid the gimmicks
However, people should not fall for marketing gimmicks that promise freebies in the name of festive offers. Some developers tend to throw in a free trip abroad, offer a new car or offer freebies like a free air-conditioner, modular kitchen, refrigerator or high-end television set. Always calculate the per-square-foot cost of the property after including the festive deals and compare that with the market rates that prevailed before the festive period. In many cases builders increase the basic sale price of the property and bring out some festive offers just to make a buzz in the market.
For home buyers, the product should be top priority. The location, layout, specification, amenities and, above all, the quality and reputation of the builder matters most. A buyer needn’t get carried away with promotional content. He needs to carefully evaluate the value addition and utility of the promotional scheme vis-a-vis the actual price being paid for the product. At times the price of the property is inflated to cover freebie costs. Hence, the buyers need to adopt a cautious approach.
Table: Festive discounts being offered by key developers across Indian metros
|Runwal Group||Runwal Gardens, Mumbai||No Stamp duty & Registration cost|
|Runwal Bliss, Mumbai|
|Lodha Group||No EMI till August 15, 2022|
|Puraniks||0% Stamp Duty|
|Wadhwa Group||Atmosphere 2 (AER), Mumbai|
|Signature Global||All Projects, NCR||Gold Coins with each booking|
|Art World||City Of Dreams, NCR|
|All projects, Hyderabad||Spl discount for 2 days|
|Assetz||Selective projects, Bengaluru||20:80/Flexy payments|
|Krishvi||All Projects, Bengaluru||Flexy payment option, on spot discount|
|Purva||All Projects, Bengaluru||Spl discount options|
|M3M||M3M CornerWalk, in SPR||Pre-leased investment opportunities with attractive propositions like 9 years lease, 3 year lock- in period|