Real Estate Developers in Mumbai Offering Incentives to Push Home Sales

Real estate developers in Mumbai have been offering attractive discounts and incentives to the buyers. They are sending messages and emails to potential buyers, offering discounts in order to push sales. Many real estate agents are offering seven to 15% cuts in property rates. Some are offering incentives such as a motorbike, gold coin, free vacation or a modular kitchen. These incentives are being offered to lure potential buyers into making an investment.

These activities pick pace during the festive season when real estate activity is higher. Enquiries increase and it is the best time for developers to attract the attention of potential customers towards their project. They come up with offers such as- 'pay 20% price of the apartment and rest can be paid at the time of flat possession' or 'get 10-12% discount on one-time payment' and 'no instalments till flat possession'.

In 2014, property analysts expected October to December period to garner sales of more 60 thousands units across seven large cities in India. Approximately 15% discount is expected in this festive season. Real estate companies and brokers raise their sales pitch during this season in order to sail through falling demand and crunch of liquidity. This crunch has been created by developers because they prefer sticking to high property rates.

Since lenders are also lending money at high rates, lack of funds has disrupted cash flow for developers. Since individual home buyers are getting easy home loans from banks, realty companies are trying to attract buyers to get rid of inventory. In such a scenario, developers are left with no option but to offer interest subsidies and discounts.

By this year end, sales of properties are expected to reach 200,000 units across India during the festive season. Last year, brokers were willing to give a discount of 10-12% on the upfront price of flats to attract buyers. Discounts vary according to location, for instance, in Gurgaon, discounts vary in the range of seven to 10% based on which area you have chosen to buy a property. According to real estate experts, the trend of offering discounts has increased at a time when property rates are expected to shoot up due to a stable government and positive reforms.

Realty sector in India has been trying to overcome declining sales and high inventory for last two years. According to the research firm Liases Foras, MMR (Mumbai Metropolitan Region) had an inventory of 53 months at the end of June. Developers have been battling fund shortage as not many lenders were willing to invest money in the property sector. However, now with a stable government, people are expecting a positive outlook in terms of sales and launches of residential units.

So, at a time when interest rates are rising and demand is tepid, buying 2 or 3 BHK flats in Mumbai can get you attractive discounts or incentives, if you are lucky. Don’t forget to ask your broker for more details.

Shruti Decosta is a real estate blogger who loves to write about upcoming residential projects in Mumbai, Pune, Nashik.