Recently, a Delhi-based home buyer, Dilip Sahu received a demand letter from his developer. The Noida-based firm sent demand letters to all its buyers announcing its ‘Mission Completion.’ The letter is a direct appeal to pay the due amount and get a discount of 6%. The letter reads that, “…the initiative is only to ensure that our projects get completed in a speedy manner.” While the letter speaks volumes about the extent the firm is willing to go to, for pushing sales and getting payments, it also suggest that the firm is focusing on the completion of the project. However, the ground reality is that most projects that are being developed by this firm, are delayed and are fairly behind schedule.
Currently, the real estate market is under stress on account of high levels of unsold inventory and subdued demand. In order to match the decreased demand and mitigate the risks of an oversupply situation, development firms have reduced the number of launches. Delhi-NCR has the highest number of inventory pile-up in the country. While the rates are under pressure in the under-construction market, the resale market too, has been affected across a number of micro-markets. Builders fully understand gravity of the situation. Kumar Bharat, director, BCC Infrastructure Pvt Ltd, a Delhi-based builder who has been developing a project in association with real estate fund, HDFC PMS, says, “I think the buyer is worried about the delivery of projects. Several launches of new projects with no or very little delivery, have shaken the confidence of the buyers. I do not think discounts will help the situation.”
While there are firms, such as the one Sahu has invested in, that are seeking payments, there are others who are launching special subvention schemes. A number of developers have announced a special booking scheme with only 2% of the total property value as the earnest money. The remaining is to be paid after two years.
Another set of developers is seeking buyers’ attention by offering them a low booking price of just Rs 1 lakh for a flat in their upcoming projects across Noida, Greater Noida and the peripheral regions of Gurgaon. Some others have already started offering discounts as high as 6-10% on quoted prices. This trend is more prevalent in regions such as Noida Extension, falling under Greater Noida, Noida Expressway, new emerging sectors of Noida and Dwarka Expressway. These regions collectively have around 3 lakh units under-construction.
Sanjay Rastogi, director, Saviour Builders Ltd, a Ghaziabad-based builder firm, says, “Buyers have an advantage in this kind of a market. While the prices are under pressure, the developer community is now focusing on the delivery of projects. In the next two to three years, the region will have several ready-to-move-in options.”
However, uncertainty over the project completion can be a cause of concern for many. While there is a huge inventory of under-construction properties, there are some completed properties in Gurgaon and new sectors of Noida. As per market estimates, around 20,000-25,000 units are complete and ready for possession. Rastogi adds, “Ready-to-move-in-properties offer hedge against inflation and uneven economic environment.” Thus, ready properties and projects nearing completion can be a good bet.
However, you need to shell out extra money for buying such properties. If you are investing in an under-construction property, check the completion date mentioned in the sale agreement. Assess the project’s actual delivery time as per the site’s real scenario. Invest only when you are sure of its completion.