Home buyers insisting on discounts from builders
Operating on thin margins, realtors unable to offer wider price cuts, but flexy payment options: Survey
image for illustrative purpose
Capturing the consumer trends in the realty estate, experts have suggested that home-buyers desire for discounts along with flexible payment options as an incentive. The survey also captured the growing interest of homebuyers in realty as an investment option over
traditional choices such as stocks and fixed deposits. Industry experts say that builders already reeling under margin pressure and might not be able to offer wider discounts. However, realtors are offering flexible payment options to the buyers.
According to the survey conducted by real estate portal Housing.com and realty body NAREDCO, real estate continues to be the preferred mode of investment for 43 percent of surveyed in comparison to 35 percent of respondents in. The other preferred mode of investments are stocks with 20 per cent fixed deposit 19 percent and gold 18 per cent.
"As the economic recovery is scaling up gradually in backdrop of festive tailwinds, buoyant capital markets, softening of home loan interest rates, record high foreign reserve & FDI increasing employment rate and optimistic demand impetus. Slash in GST and Tax benefits will go long way in strengthening sustainable demand and built on signals positive consumer confidence index for H2 FY 21-22," said Dr Niranjan Hiranandani, president, NAREDCO.
The NAREDCO president also stated that, at present, builders are earning thinner profit margins and might not be able to offer wider discounts since the market is driven by the demand. The priority remains to exhaust the overhang inventories before beginning new housing projects.
Other finding states that the 71 percent of the respondents wish for flexible payment plans and
discounts, which may provide financial aid during the pandemic period and drive them to make
purchase decisions.
The report states, "While the second wave did see homebuyers shying away from making a
purchase, subsiding coronavirus cases has seen buyers resume their home searches a lot quicker than after the previous lockdown period."
"Builders' margins for under construction properties have reduced due to increase in construction costs and land prices in some cities. Therefore, there is little scope for reduction in basic selling price (BSP). However, builders have been offering flexible payment plans and discounts in some cases to attract customers," said Mani Rangarajan, Group COO, Housing.com.
Rangarajan, during the survey announcement, said that unlike the first wave of Covid-19, the housing realty segment during the second wave (of the pandemic) has shown great resilience, with demand and supply both growing during April-June 2021 in comparison to 2020.
He also reiterated to the demand that state governments should reduce stamp duty on registration of properties to encourage homebuyers. Among the popular search of home-buyers include recreational spaces and daycare centres. With corporates adopting work-from-home and hybrid work policies, homebuyers are expressing interest in looking for homes with adequate space.
