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Media Information
Free Gifts Fail to Lure Home Buyers

Published & Updated as on - 2010-04-02

A recent survey by Delhi-based — a real estate portal run by the People Group — has revealed that 66% of Pune buyers have turned down the freebies. Called Me, My Home and Property Rates, the survey covered Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bangalore and Pune. “Freebies do not sway a majority of home buyers. For them, the greatest value proposition is a lower per square foot rate than the prevailing one,” said business head of Aditya Verma. The study was conducted by from January 23 to February 10 by posting queries and searches on the website. Builders who offered hi-tech gadgets and other accessories to lure buyers agreed that the “gimmicks” have failed to pay off.

“Offers are not helping in any way as people are not interested in buying properties,” said Cubic Insignia and Krome Promoters and Developers managing director Nainesh Nandu. The company had announced a BMW worth Rs27 lakh, two kg gold or 0% interest on loan up to Rs2 crore with each purchase of its bungalow project on NIBM Road. Nandu said there has been a complete lull since this January. For Infrastructure Developers Engineers Builders (IDEB) from Bangalore with its project Springdale Properties at Wagholi, offers of gifting flashy cars has not worked.

“The response has not been encouraging,” said a sales manager at Springdale. The company had offered Hyundai Accent and Honda City with the purchase of flats and bungalows. Pune-based Mont Vert Developers too announced gifts like air-conditioned rooms and LCD televisions. Director of Mont Vert Homes Manish Kaneria agreed that the response was not encouraging given the current low sentiments in the market.

Last week, Vijaydeep Associates from Pune announced a Chevrolet car with every purchase of its 2BHK flats at their project Deccan Gold in Kharadi. The company also offered a 1BHK flat free at Ambarnath near Mumbai for the sale of a 3BHK at its Pune site. Home buyers in Pune have not only shunned freebies but have also made a shift towards affordable housing with a large chunk of people looking for homes below Rs30 lakhs (85% respondents as per the survey). Many are waiting for a massive price correction in the coming months.

While Delhi and Mumbai has about 67% and 68% buyers waiting for the rates to fall, Pune topped with 82% of buyers looking for a reduction in real estate prices. “Responses to price correction were levelled across categories, people are aware of a considerable price correction in the markets and are therefore hopeful that real estate prices will undergo some correction,” the survey said. Among the 82%, 32% buyers want the prices to drop in the next three months, another 39% expect the prices to fall over the next three to six months. The survey has shown a clear mismatch between what home makers are offering and what buyers want today.

“It is time that developers start re-working the price strategies and come up with houses which are below the Rs30 lakh bracket,” Verma suggested. In Pune, the demand for high-end housing has fallen with only 14% people looking for houses in the Rs30-60 lakh bracket. “There are absolutely no takers for houses above Rs60 lakh,” he said. President of Promoters’ and Builders’ Association of Pune (PBAP) Lalit Kumar Jain, said, “It was known that such offers would not work with buyers in Pune as they want clean transactions. That is the reason why several builders who announced such schemes have now pulled them back.”

Source: Indian Realty News 3/3/10

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