What home buyers want in 2017?

Bottom Line: Track2Realty conducts a pan-India survey to find what home buyers want in 2017.

•    Have you ever been consulted by the real estate developers about your wish list?

•   Would you like to put forward your suggestions to the developers if involved from the very beginning of project planning?

•    Are you ready to shell out more money if the project or apartment is designed or customized as per your needs?

•    Do you foresee that 2017 will be the turnaround year when the developers will be forced to focus on customer-centricity and engagement?

• What is your wish list in the housing market today?

These are some of the questions that Track2Realty, the real estate think-tank group, asked the home buyers on the eve of 2017. The home buyers across the country were very sporting and a majority of them, as many as 82 per cent, believe that the chasm between the builder and the buyer can be bridged to a considerable extent if only the developers genuinely come forward for a dialogue with the buyers to understand their point of view.

More than seven out of ten, 72 per cent maintain that the buyer must have access to communicate with the builder throughout the project lifecycle. Nearly as many, 68 per cent, feel this will address the basic issue of conflict, even if there are changes in the layout of the project.  More than half of the home buyers feel if the developer starts collaborating with the buyers, then the buyers will also understand his point of view, in case of any delay, policy paralysis or other force majeure.

Track2Realty conducted this survey in ten cities – Delhi-NCR, Mumbai, Pune, Bangalore, Kolkata, Chennai, Ahmedabad, Lucknow, Coimbatore and Hyderabad. A total number of 2000 home buyers were interviewed.

The survey respondents were a mix of seasoned home buyers with experience of more than one property purchase and the first timers who were on a house hunt. The survey had a mix of open-ended and close-ended questions to understand the concerns of the home buyers through a psychographic analysis.

Can communication and honest dialogue save the home buyers from hidden charges or other unjustified penalties? A majority of them, 66 per cent think that issues like hidden charges, escalation clause or even equal penalty can be settled if the developer is honest to come forward for discussions.

“Open and honest dialogue can take care of majority of the issues as today’s discerning home buyers do understand the concerns and legitimate problems of the developers. Similarly, most of our concerns are not something that will cost the developer any fortune. The real issue I feel is the lack of trust,” says Pramod Gupta, a home buyer in Gurgaon.

But the developers have their own reasons to be evasive. Devang Trivedi, Managing Director of Progressive Group feels the element of arm-twisting and bullying on part of the home buyers is a reality today if they are involved in project right from the beginning.

“The idea is to keep your position safe from the vested interests who pose to be guardians of home buyers’ causes. The developers who were earlier upfront with the buyers are today evasive because they have already burnt their fingers,” says Trivedi.

However, Nikhil Hawelia, Managing Director of Hawelia Group does not seem to agree with this when he says that the real problem is that the top management is not involved, with both the execution and with the home buyers. This creates a vicious cycle of lack of trust.

“From my experience, I can vouchsafe that if you communicate properly with the home buyers they will not only give you some end user perspective for project enhancement but will also be your partner in progress, either through repeat buying or referring friends & families,” says Hawelia.

The question is what would be the home buyers’ wish list if the communication channel is opened for them. The study noted that the demand of the home buyers in this part of the world are not very unrealistic as majority of them are grounded in to reality.

Nearly everyone, 94 per cent is concerned with the fiscal mismanagement of the developers and they demand a separate escrow account. This is something that is anyway inevitable once the regulator assumes office in the year ahead.

The second most important issue for the buyers is fair Builder-Buyer Agreements. 88 per cent demand indemnities for delays, poor workmanship etc. This again is very much on the cards as post regulator regime there would be a well defined defect liability clause. 86% home buyers demand sale on carpet area; something that has already been approved with the RERA.

Beyond these three demands that have already been met with the RERA, the homebuyers also demand a buy back offer from the builder. While 54 per cent expect a complete refund within 45 days of home booking, another 46 per cent of home buyers demand buy back at market price or slightly lesser price than market value anytime during the construction lifecycle.

Additionally, a majority of home buyers, as many as 60 per cent, also demand removal of transfer charges, at lest the first time. 22 per cent crib the transfer charges are way too high, while only 18 per cent are ok with it, if only the property has appreciated to a considerable extent.

These are not very unreasonable expectations and can be achieved without any extra burden, if only the developer is committed to adopt best practices. However, that is easier said than done and Indian real estate has a long way to go before they can claim to be at par with the developed countries.

There is a lot that needs to be done at government level as well to instill confidence in home buyers. Land titling, title insurance, quick judicial remedies, standardisation of numerous norms etc are areas yet to be addressed.

Home buyers’ wish list is not very unrealistic or not achievable. These are:

• Title assurance and right to see all approvals in place
• Rates based on carpet area
• Right to a full refund within 30 days of booking
• Equal penalty for delay in completion
• No change in area bought
• No hidden charges or escalation charges
• Separate escrow account mechanism
• Free first transfer
• Fair agreements with indemnities for delays, poor workmanship etc.
• Open and transparent communication throughout the project period