By one estimate, the unsold inventory across India is still upwards of 10 lakh units valued at a staggering Rs 6 lakh crore. Most developers are financially strapped and, therefore, struggling to either complete projects or clear inventories. Even those that are better off --- less than 5% of the universe — aren’t too optimistic about selling much. So, the launches will be limited.
With new launches at just 20,849 units — a third of the number seen in 2018 — this Diwali will be the seventh straight season of subdued sentiment. Although builders are working hard to win over customers, property sales will likely stay dull. In fact, the launches last year were 25% lower than those in 2017. Rahul Grover, CEO, Sai Estate Consultants which runs offers on behalf of developers, said the enquiries have been good but the shortage of credit due to the NBFC crisis could be a dampener. He added that conversions may be slow and there could be cancellations. “Much like last year, when the IL&FS issue broke just before the festive season, the DHFL and PMC Bank crises could hurt. So, we need to wait and see how the season goes,” Grover said. Grover’s caution is understandable since last year, 40 of the 50-60 bookings for a particular project were ultimately cancelled.
By one estimate, the unsold inventory across India is still upwards of 10 lakh units valued at a staggering Rs 6 lakh crore. Most developers are financially strapped and, therefore, struggling to either complete projects or clear inventories. Even those that are better off — less than 5% of the universe — aren’t too optimistic about selling much. So, the launches will be limited. Despite this, given how buyers are still diffident, hoping prices will come down, developers will need to make the deals attractive.
The erstwhile popular subventions scheme is gone. Now, builders are offering flexible payments in the form of construction-linked and possession-linked plans; after the initial booking amount, the buyer pays as and when the construction progresses or when it nears completion. They are throwing in extra parking and a zero floor rise.
One unlisted Mumbai-based developer Spenta Corporation claims the project will be ready for possession by December 2022, or two years before the deadline given to Rera. Should they miss the deadline, they will pay buyers an assured rent of Rs 50,000 for a two-bedroom apartment and Rs 70,000 for a three-bedroom one until they move into their own homes. The apartments are priced in the range of Rs 1.43-2.43 crore for an area of 623-1,041 sq ft. Another builder in Sion, Mumbai, offered a Renault Triber if a booking was made in the first week of Navratri and a Royal Enfield if it was made later.
Samir Jasuja, founder and CEO, PropEquity, pointed out that there has been some uptick in enquiries and bookings in Pune, of around 4%, but other cities have seen sharp decline compared with last year. “Cities like Chennai and Hyderabad have seen a major drop of 29% and 24%, respectively, in residential bookings and enquiries, Jasuja added. “Moreover, NCR, MMR and Bengaluru have also seen a substantial dip of 9%, 8% and 13%, respectively,” he said.