Real estate developers dole out cash discounts, freebies, 10:90 schemes this Diwali

Diwali 2021 comes after two waves of COVID-19 and brings with it a wide range of freebies, discounts, decadal low home loan interest rates, voluntary stamp duty waiver schemes by some developers and offers such as the 10:90 payment plan for homebuyers.

The sops seem to be working.

ANAROCK Research indicates that we may see at least 10-15 percent growth in housing demand in the ongoing festive period (Oct.-Dec) across the top 7 cities against the preceding quarter. In Q3 2021, the top 7 cities saw total housing sales of approximately 62,800 units – already the best quarterly sales since pandemic.

If the current predictions hold true, the ongoing festive quarter will see at least 35-40 percent yearly rise in overall housing sales across the top 7 cities when compared to the same period last year. In Q4 2020, the top 7 cities saw total housing sales of about 50,900 units, it said.

A research by Liases Foras has said that housing sales across tier I cities increased 57 percent over the last year because of increased vaccination, low interest rates for home loans and flexible payment plans. Bengaluru shows 99 percent recovery to pre-pandemic levels, followed by Pune and Hyderabad. Prices remain stable in Tier-I cities.

Several developers in Mumbai are absorbing stamp duty for prospective homebuyers after the success of the government stamp duty waiver that ended on March 31, 2021.

Pankaj Kapoor of Liases Foras told Moneycontrol that there is positivity towards house purchase this festive season. Besides the lowest home loan rates, builders have not increased prices, there are willing sellers and buyers who are showing a propensity to buy into projects that are nearing completion or are ready to move in. Secondary properties are also witnessing traction.

"Much of the new supply that has hit the market this festive season has been introduced along with freebies, discounts, flexible payment plans. Builders are keen to offload ready inventory as lenders have hit the pressure. Most developers in Maharashtra are offering stamp duty waiver to buyers as they are eligible for a rebate in their premium. In NCR too, habitable locations are gaining traction," he said.

Several developers are absorbing the stamp duty in Maharashtra. This is because this has proved to be a tried and tested method of boosting sales in the market. The government initiative worked wonders for the luxury segment after the first wave of COVID-19. "Now it is benefiting the affordable and mid-segment buyers," said Ritesh Mehta, senior director and head - West, Residential Services & Developer Initiatives at JLL.

The Maharashtra government had in January this year issued a government resolution (GR) reducing construction premiums paid by real estate developers by half after the cabinet approved the proposal. According to the GR issued by the urban development department, builders have to pay premiums based on the Ready Reckoner (RR) rates of 2019 or 2020, whichever is higher. Developers who opt to avail the discount will have to give an undertaking to local bodies that they will pay the entire stamp duty and not charge any stamp duty from home buyers. This benefit is only on premiums and not on development charges and cess. It is also applicable for both ongoing and new projects. The scheme is valid till December 31, 2021.

So, what's on offer this festive season?

Cash discounts are being offered on the per square feet price. For instance, on the brochure rate of Rs 4,000 per sq ft, a cash discount of Rs 200 is offered. On a 1,000 sq ft apartment, this works out to Rs 2 lakh.

Freebies such as air conditioners, television sets, furniture, modular kitchens, zero maintenance and club membership, gold coins, and iPhones are also being offered.

While stamp duty varies from 3 to 10 percent depending on the state, registration charges work out to 1.1 percent on a property worth over Rs 25 lakh. The Maharashtra government had decided to temporarily reduce stamp duty on housing units from 5 percent to 2 percent until December 31, 2020, to boost the stagnant real estate market hit by the COVID-19 pandemic. Stamp duty from January 1, 2021, until March 31, 2021, will be 3 percent but this was discontinued. Despite that, some developers continue to waive off the stamp duty charges which means further savings for the buyer.

In Mumbai, for its projects located in Kanjurmarg East - Runwal Bliss and Runwal Avenue - the Runwal Group is offering customers flexi-payment plans and zero stamp duty. For Runwal Forests in Kanjurmarg West, they are offering a deferred payment plan in which you can pay just 5 lakh now and nothing until December 2022. At Runwal Gardens in Dombivli, Runwal Group has launched new inventory and is also offering zero stamp duty and zero floor rise and other festive benefits.

Mumbai-based CR Realty is also offering flexi-payment plans and zero stamp duty offer on their project Primo in Bhandup throughout the festive season this year.

"Low-interest rates by leading banks and various discount offers by developers are believed to be the key reasons behind the revival in consumer sentiments in these markets. Combined together, such factors are helping real estate sales to return back to pre-Covid-19 levels," said Cherag Ramakrishnan, managing director, CR Realty.

This Diwali, Tridhaatu Realty has come up with the zero stamp duty offer on their various residential complexes, Tridhaatu Aum, Morya, and Prarambh.

"Property developers are picking up the stamp duty tab this festive season for the prospective homebuyers. It is proving to be an effective element along with other available offers such as financial schemes, freebies, cashback, etc. As far as the real estate sector is concerned, this time the reason to buy a home goes beyond the traditional beliefs associated with the festival of Diwali and has more to do with the multiplying benefits and make the investment more profitable." Said Aditya Kedia, Managing Director, Transcon Developers.

Daniele Russolillo, deputy CEO and COO, Planet Smart City said that at the project Universe, Kolte- Patil Developers has launched a special offer – The Great Home Coming Festival. As part of this offer, buyers at Universe will get a voucher worth Rs 1 lakh and goodies like a free modular kitchen, AC, Smart TV, fridge, washing machine, and other electronic appliances.

For Gaur World SmartStreet (Greater Noida West), where retail shops start from Rs 24.95 lakh, Gaurs Group is offering 12 percent assured return, one assured gift, a 30:40:30 payment plan, and an SUV car to a lucky winner.

Punjab-based Sushma Group is offering to pay rent to buyers till they get possession of their unit. This offer is valid for 14 different residential product options with Sushma Group in Tricity, Chandigarh, for a period of three to 15 months.

What should homebuyers keep in mind?

Homebuyers should evaluate festive offers and freebies on their intrinsic value rather than their flashiness.

  

By 3bindia.com