MUMBAI: Statistics may highlight the rising realty inventory but the undercurrent in the Mumbai property market indicates that revival is very much on the cards.
As a matter of fact, the realisation of the developers that they need to come out of the economic corridors of uncertainty is a key indicator that the upcoming festivals would be the beginning of a new cycle of growth. It is not just a wishful thought that is borne out of festive euphoria; rather, the developers seem to have gone through the learning curve in the last few years.
As a result, the Mumbai property market is guided by pragmatism that is expected to drive it on the growth curve. The early indications also point out the fact that even buyers are on the lookout for better deals.
Shiya Sharma, a doctor in Vasai, is on the lookout for a 3-BHK and she feels that this is the right time to negotiate a deal as the overall slowdown has already affected the market to the extent it could. Carrying no fancy thoughts of any price correction or crash, she is worried that if not now, the improvement in the economy and sentiments may lead to a price appreciation. There are many potential buyers in Mumbai who carry the same thoughts.
“My only wish is that during the festivals, some innovative schemes and offers are available in the market. I don’t think any price crash is feasible in Mumbai’s property, where demand is always more than the supply. Moreover, the economy may be slow moving but it is stable and no financial institutions have crashed; rather, their prudence in lending to the developers and the buyers is leading the market in a realistic direction. All I am looking for is a good bargain,” informs Sharma.
It seems that the prayers of an average buyer like Sharma have already been answered by the emerging market dynamics, where Mumbai’s developers are channelising sales with a new format and strategy. What has made them all the more realistic is that instead of launching more and more new projects during the festivals, the focus this time around is on selling the existing inventory. As a result, many new schemes, offers and marketing formats are making way into the property market.
For instance, one developer in the city has offered an interesting scheme. He proposes that after paying the booking amount of 20 per cent up front, the buyer needs to pay 20 per cent once every year, with the last installment of 20 per cent on possession. This scheme would not be linked to the progress of construction. Some other developers are planning to offer freebies like 100 gms of gold coins, discounts, cash back of monthly rentals up to a year, free parking facilities and payment of stamp duty and registration charges if the buyers book a property during the festivals. The idea is to boost sales with a variety of tempting offers and freebies.
Recently, one of the developers organised a ‘Home Loan Mela’ at its project site to simplify the process of home buying for customers. The developer tied up with financial institutions to provide on-the-spot loans to customers. Banks also provided special schemes like subsidised registration fees, waiving of an EMI installment for on-time payment, special interest rates, etc.
Gopal Sharma, GM-marketing, Gundecha Builders, agrees that most customers believe that buying a property during festival time or on a particular auspicious day is a big blessing. However, it is expected that some developers are likely to offer certain rewards or incentives during this festive season to lure the buyers. In Mumbai, people normally buy a home once or twice in their lifetime, which is a great achievement for an individual. Hence, everybody tries to book a home on an auspicious day; as a result, it has been observed that during this period, there is a definite increase in sale.
“Although the market is pretty flat today, there will be a definite improvement in the coming festive days. Simple freebies do not work in real estate and only lucrative incentives, which make substantial difference have to be put to test. Developers offering discount is not on the cards as of today. There will be more launches in the coming days but the main focus will be more on selling current projects to reduce the financial crunch, which is the need of the hour for most of the developers,” adds Sharma.
Santosh Naik, MD and CEO of Disha Direct, believes that not many new launches will happen as all the developers will focus on selling existing inventories. According to him, developers are looking forward to the festive season to increase sales and there will be a lot of marketing and promotion happening during this period. Developers will use the traditional print and outdoor media medium but they will also explore new media like digital and radio.
“The market is pretty flat in metros but I expect it to pick up during festive season as developers will offer discounts, schemes and offers to attract buyers. The time has come now that developers should use product, marketing and promotional innovation as there is no product differentiation in the same price product. So, developers need to attract buyers with innovative ways. I foresee a lot of innovation happening during next few months,” opines Naik.
By and large, it is believed in the Mumbai property market that the differentiation would be the marketing format and packaging this time around. As the developers are keen to sell existing housing stocks, there will be few launches happening and the volume will be less this festive season. All developers will offer discounts, schemes and offers but ultimately, the winner would be value for money products, as today’s buyers are very smart and they know that there are no free lunches. Customers are hence expected to bargain hard for value for their hard earned money. Developers seem to be ready to make this festive season count with discounts and this pragmatism may lead to the recovery of Mumbai’s property market during the festive season.