Property developers in India are offering substantial discounts amid the global finance crisis impacting the real estate sector. Sales posters and advertisements tout 'discount bonanza' deals, with more enticing offers upon deeper investigation.
Incentives include free covered parking spaces, exemptions from preferential location charges, and discounts on the rate per square foot of the property. Some developers are also covering paid interest and offering holiday packages. Additional offers include paying stamp duty and registration fees, which typically account for 4% to 10% of the property cost, as well as covering electric bills for a set period.
'These discounts are primarily used as marketing tools by developers in Delhi, Mumbai, and Chandigarh. The trend is expected to continue until interest rates stabilize and capital values cool off,' said Sandeep Goel, Managing Director of MSX Developers Pvt Ltd.
Interest rates are a significant factor driving property prices down, as many purchasers cannot afford to buy due to rate hikes from 7.5% to over 12%. This has led to budget constraints for homebuyers, who are now opting for smaller tenements or waiting for interest rates to drop. 'For the festive season, we are offering heavy discounts on down payments,' stated Rakesh Yadav, Managing Director of Antriksh Housing Constructions.
Despite these challenges, developers remain optimistic that prices will rise again. 'Now is the right time for actual buyers to purchase property during the festive season, as costs will rise. The industry forecasts positive long-term prospects for the sector,' commented J B Kramchandani, Senior Vice President of Parsvnath Developers.
'Two and three-tier cities are also driving the country’s investment and growth phase due to their unexplored potential. These offers still present a good deal in terms of potential price appreciation,' he added.
However, not all developers are making offers. Sanjeev Srivastava, Managing Director of Assotech Limited, stated that his company does not believe in offering incentives to sell apartments. 'The quality we have delivered and our past record of timely property delivery have created strong goodwill among our prospective buyers,' he pointed out.
'Buyers booking properties with us during the current Diwali season are confident about the Assotech brand and its commitment to providing innovative and cost-effective products in due time,' he concluded.