Monday, October 6, 2008

Will Diwali cheer up the real estate sector?

The festival season:

Navratra and Diwali time is back once again. This is also the time when people associated with the realty sector look forward to start their new projects and also work overtime to sell their flats and commercial space. This year, Diwali time is all the more important for property developers and sellers as the dark clouds over the realty sector have not given way to even a sliver of light in the last many months.

They are only hoping and praying that things will change now. With renewed vigor and energy , builders all over the country see the Diwali season as an opportunity to boost their sales. In the same way, developers are gearing up to promote their sales by offering attractive discounts and freebies.


From ravi karandeekar's pune real estate ads picasa blog
Traditionally, right from Navratras to New Year, the realty sector sees a flurry of activity . People either book or buy their homes during this time and the business community, which is very god-fearing , also purchase new office space at this time, says Dr Devinder Gupta, chairman of the realty advisory Century 21 India, “There have been an increase in enquires in all their offices in the last two weeks or so. We can only hope that these enquiries transform into deals.”

Hoping for the best:

Those closely associated with the world of realty say builders are pinning their hopes upon central government employees for deals to come through as they received a hefty hike in their salaries, coupled with arrears. Builders are pretty sure that a large number of these central government employees will buy homes around Diwali time.

Only recently, a very well known builder issued an advertisement in the leading newspapers of the capital, with many freebies for government employees. The advertisement reads: “Convert your arrears into your dream home” .

It clearly shows that builders are expecting good response from central government employees for their projects. Another prominent infrastructure developer has joined hands with a leading financial institution , offering easy loans and flexible-payment plans to the buyers.

In fact, things have come to such a pass that a real estate company is reportedly offering a Maruti SX4 to all those who would purchase an apartment.

Various schemes:

Similarly, Ansal API is also launching many projects in the NCR, UP, Rajasthan and Punjab in the festive season. The company plans to offer EMI-holiday till possession is taken, for some of their projects. Surinder Jha (name changed), who works for Press Information Bureau, says that with builders offering lucrative schemes, he has made up his mind to book a flat in either Indirapuram or Vaishali.

A Mumbai-based developer , Orbit Corporation, is offering a 15% price discount on its residential projects in central Mumbai. “We are willing to bring down prices by 15% for bookings during Diwali and it can go up further , depending on upfront payment by the buyer,” says R Yadav, CFO of Orbit Corporation .

“Even with these attractive offers, if developers fail to generate demand this Diwali , the downturn would continue for a longer period ,” warns Devinder Gupta.

Other freebies:

Pramod Chopra, an east Delhi based realty advisor, says that the main attraction for most people is that builders are willing to allow bargain on prices, and do offer relief in other fees.

Some of them are learnt to have offered freebies such as free parking, furnishing and even sharing of stamp duty and registration fees. According to one report, Sunil Mantri Realty, developing a housing project in Mumbai, is offering to bear 50% of the stamp-duty cost.

Meanwhile, a Delhi-based broker, Anil Makhijani of Mak associates , says that some people are apprehensive about the genuineness of some of these schemes.

As investing in a flat is a big thing, buyers want to be sure of their investment, and the credibility of the developer matters.
By- Sarthak, ET Bureau - The Economic Times

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