Within months of charging the moon, Indian real estate firms are now offering buy-back of properties, free cars and even free apartments to tide over the current slump which has seen sales halve from the beginning of the year.
Mumbai-based Cosmos Group has launched the 'Ghar pe ek Ghar free' (one house free on every house) offer at its four upcoming housing projects in Thane near Mumbai and Lonawala near Pune.
The buyer will get a 1-BHK flat free with a purchase of a bungalow or a big flat, while with a 2-BHK flat, a bedroom and a kitchen come free.
Another property developer, Sunil Mantri Realty, has launched an 'assured buy-back offer' at its housing projects at Mumbai, Gwalior, Solapur and Bangalore. If the property price goes below the purchase value, the company will buy it back at the same price on the condition the buyer holds it for three years.
Delhi-based Jaypee Group is offering BMW-3 Series, Mercedes Benz or Toyota Camry luxury cars free, depending on the size and value of its flats at Noida and Greater Noida. And Ghaziabad-based SVP Group is giving 50 gram gold coins for apartments at Ghaziabad priced between Rs 45 lakh (Rs 4.5 million) and Rs 2 crore (Rs 20 million).
Desperate situations, desperate measures. These mind-boggling offers, mind you, have been thrown in during the Diwali and Navratra season, when many buyers think the time is auspicious to invest in real estate properties. But the meltdown in the sector has forced real estate developers to think out of the box.
"We have to look at innovative methods to improve sales when liquidity is tight and banks are not lending to developers," said Sunil Mantri, the promoter of Sunil Mantri Realty. Mantri has already waived off stamp duty and registration charges for its Goregaon project and has given a discount of 6 per cent for its Bangalore project.
Still, companies and brokers said there are very few enquiries from buyers. "You cannot compare this Diwali with any other Diwali in the last 10 years. Sentiment is totally negative," said a top DLF executive who did not wish to be named.
Sector analysts said a lot of developers need cash desperately and therefore have no option but to sell their existing stock in a hurry. Raminder Grover, the managing director of Homebay Residential, a subsidiary of property consultancy Jones Lang LaSalle Meghraj, said: "Developers have a lot of stock which they need to clear and make money. Diwali is the best time to do that. Unfortunately, nothing much is happening."
Ironically, these unheard of offers have been launched when advertising budgets of developers are getting pruned. According to a senior executive of a realty publication, realtors have cut their ad spends by 7-8 per cent in recent times.
"Our ad volume from the sector has gone down drastically in the past few months," says the executive who preferred anonymity. Another media buyer said, "Despite advertising various offers, developers aren't getting the right response from the consumer. The consumer response has gone down by almost 90 per cent."
With inputs from Neeraj Thakur
