NCR Developers are Offering Benefits up to 25% of Property value to Serious Homebuyers
NEW DELHI: Unable to reduce property price directly due to high circle rates, leading real estate developers in NCR are offering benefits upto 25% of the property value to serious homebuyers in a bid to offload piled up inventory and tide over the liquidity crunch many are facing after the Covid-19 induced nationwide lockdown.
Property consultants say that some developers are even ready to sell limited inventory at no profit to generate cash flows.
In a way, we are selling the flats at 75% of the value as the money will help us in completing construction in our other projects. If we talk about the price, we were selling at this price in 2017, when the project was launched. The circle rate doesn’t allow us to reduce the price directly, so we are giving payment receipt for 100% but taking 75% from the customer,” said Mohit Arora, Managing Director of Noida based Supertech group.
Selling property at lower than the circle rate attracts penalty for the developer.
Supertech is selling flats on cost in its high end projects “North Eye” and “Supernova” in Noida while it has already reduced prices in the mid and lower segment projects.
The Noida-based Gaurs, Mahagun and Migsun group and Gurgaon-based Raheja group are also offering flexible payment options and Covid-19 insurance to buyers.
The builders say that they have managed to reach 50% of the normal sales during the lockdown due to discounts.
“Some developers are offering discounts to create momentum. They can not reduce the price directly because of the high circle rates in most of the cities but are doling out attractive payment options and in some cases absorbing some EMIs. However, the room for further reduction of prices is extremely limited now. So as an end user, I will say this is the best time to buy a property,” said Siva Krishnan, Managing Director, Residential Services, Oversight-Strategic Consulting, JLL.
Consultants in NCR say that on an average price has been reduced by 7-8% but there are cases where cash-strapped developers are offering discounts upto 25%.
“Some under construction property which were selling at Rs 3,800 per square feet, are now finding buyers at Rs 3200 per square feet. In the ready to move in projects, if the buyer is ready with the payment, he can ask for a deep discount,” said Shauzab Kazmi, a consultant at Noida based Investors clinic.
Developers of luxury and super luxury residences in NCR are however reluctant in reducing prices and some of them even claim they will ‘hike prices’.
DLF, which sells high end condominiums in Gurgaon, one of the costliest locations in the country, said that the last price hike was in April 2019 and a price hike is in the offing.
“Most of the customers are end-users and are self employed professionals. The Covid-19 situation has increased the importance of gated condominium and high-end facilities provided by operators,” said Aakash Ohri, Senior Executive Director of Business Development at DLF.
Developers like ATS and Raheja, who are building luxury residences in NCR also said that there will be no price reduction.
“In the luxury segment, customers are willing to pay more for world-class facilities. If we reduce the price, customers might feel that we may compromise on the services,” said Bani G Anand, Director, ATS Infrastructure Ltd.
Nayan Raheja, who is developing luxury residences in Delhi said they have offered upto 5% discount and will not reduce the price further. “In some rare instances, we are offering interiors also, but to a limited number of customers,” said Raheja.
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