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Why are Indian homebuyers dissatisfied?

Posted on by Track2Realty
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Track2Realty Survey: To say that a vast majority of homebuyers in India are sulking would be stating the obvious. A pan-India survey tried to figure out the extent of dissatisfaction and the reasons behind the unhappy homebuyers.

Homebuyer Confusion, Confused homebuyer, Homebuyers grievances, Homebuyers' legal options, India real estate news, Indian property market news, Track2RealtyDissatisfaction among the homebuyers was noticed at every level, and every set of buyers had their own set of grievances. Of course, the level & extent of dissatisfaction is different in different phases of house purchase and ownership.

Only 22% of the buyers in the survey said they received a defect-free home and timely possession. A large 78% of the house buyers repent investing their lifetime savings on the house. 72% of the homebuyers say the property has neither appreciated, compared to other investment instruments, nor did they get a house worth living.

The survey could identify three levels of dissatisfaction of homebuyers – pre-purchase Possession & post purchase. The dissatisfaction is at all the three levels and the reasons of consumer grievances change with the stage of construction.

In the pre-purchase stage delayed possession is something that bothers all the homebuyers. No less than 78% homebuyers complain of delayed possession. Rest 12% of the respondents has other issues ranging from non-responsive developers to poor customer interface.

“I don’t think it is anyway justified that the developer defends the project delay with the excuse that it is not only this project that is delayed. I mean they have made it a habit in their collective consciousness and then say all the projects are delayed, as if many wrongs make a valid right,” says Sujata Mehta in Mumbai.

What homebuyers say? 

Only 22% buyers have received a defect-free home and timely possession

A large 78% of the home buyers repent investing their lifetime savings on the house

72% homebuyers say the property has neither appreciated compared to other investment instruments nor did they get a house worth living

78% homebuyers complain of delayed possession

12% of the homebuyers have other issues ranging from non-responsive developers to poor customer interface

58% homebuyers have faced the unreasonable demands of the developers and this hidden cost of the developer is what leads to buyer dissatisfaction

42% have other reasons of dissatisfaction ranging from lesser carpet area than being promised to mismatch in house specifications

55% homebuyers across the cities have complains with the poor constructions quality

45% are dissatisfied with a number of other customer interface issues, including poor facility management or the high cost of maintenance  

During the possession stage there are multiple of issues and this is the time when instead of the conflict settling down, new issues crop up that spoils the taste of occupying the house. 58% of the homebuyers have faced the unreasonable demands of the developers and this hidden cost of the developer is what leads to buyer dissatisfaction. Rest 42% have other reasons of dissatisfaction ranging from lesser carpet area than being promised to mismatch in house specifications.

“If you resist the unreasonable demand of the builder then your possession is refused. They will ask you to settle the due as per their calculations. An average salaried class with both the rent and the EMI burden over the head can not drag it for a longer period. Ultimately, you are being forced to succumb,” says a dejected Shivam Khurana in Gurgaon.

The buyer dissatisfaction does not end after the possession. Once the home occupier settles down one is confronted with the reality of poor construction quality and customer service problems. 55% of the homebuyers across the cities have complains with the poor constructions quality, while the rest 45% are dissatisfied with a number of other customer interface issues, including poor facility management or the high cost of maintenance.

“As a homebuyer you feel helpless after having made all the payments. The builder is not ready to address any of the legitimate concerns. There are, of course, legal options available but then every homebuyer can not afford the time and high cost of litigations. For the builders, it is a routine affair and a dedicated team is there is handle legal disputes,” says Roshan Mallick, a homebuyer in Bangalore.

There is another set of buyers who complain about the competitive investment failure with the project. As a Noida homebuyer sums up, “I was told that this is the prime plot of the location and with the kind of project the builder is making this project will command the maximum premium. But then the other neighbourhood properties have appreciated more and I feel like being cheated.”

Sadly, this consumer grievance can never be addressed even if the developers’ intention is right and the laws are there to protect the buyers. But the developers can definitely address the other legitimate consumer grievances during the construction cycle, possession and after delivery issues.

Poor consumer connect dent on Indian real estate

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: A Track2Realty study finds that the buyers hardly get to see the approvals obtained by the developers.

Homebuyers harassment, Project delays, Developers fault, Builders' high handedness, Real estate malpractices, Realty complaints, Homebuyers' woes, India real estate news, India property market, Noida property market, ATS, Amrapali, Supertech, Panchsheel,, Track2Realty, GaursonsA few ground realities that suggest real estate continues to be sellers’ market, more so with an opaque one.

8 out of 10 home buyers are not sure at the time of booking as to whether the developer has got all the mandatory approvals for construction

7 out of 10 developers refused to showcase even the project CC (Commencement Certificate) to the buyers

7 out of 10 buyers pay the due diligence fee to the lawyers to get the legal titles of the land, while developers only assure them verbally

9 out of 10 buyers have absolutely no idea about the fiscal management of the project and its execution feasibility

8 out of 10 buyers were persuaded by the lending banks to go by the verbal assurance of the developer

6 out of 10 home buyers really had to fight with the builder to get a copy of OC (Occupation Certificate) and CC (Completion Certificate) 

The above statistics says a lot about the way the home buyers have been taken for a ride. The developers in many cases do not have all the approvals in hand at the time of starting the booking the project. Many of them simply do not entertain the home buyers to showcase the approvals, even if they have obtained it.

Nothing hurts Indian real estate more than their inability to connect with the consumers and showcase them was is their legal right. The seeds of lack of trust in the minds of the buyers are sown at the time of booking itself as the developers do not find it necessary to showcase approvals, even when asked to, and it continues throughout the construction lifecycle.

The agony of the buyers continue till one fights for the Occupation Certificate and Completion Certificate. In Noida many home buyers have got the possession of the apartment and are living over there without the registry, as the developer has failed to get the OC for one reason or the other.

“I was simply told by the builder to take it or leave it when I wished to see the approvals and the legal title of the land. With no choice left, I made the payment of initial 20 per cent and the project has not yet started after two years now,” says a dejected Rakesh Mathur in Gurgaon.

Developers, on their part, assure that they have started interacting with the home buyers and they even address the website visitors and solve their doubts and queries which have started reflecting in their conversion ratio as well. But by and large addressing the consumer touch points is few and far between in the Indian housing market.

More importantly, the consumers are nowadays being pacified due to the fear of consumer backlash than a serious concern to address the grievances and be seen as a responsible and committed real estate brand.

Manju Yagnik, Vice Chairperson, Nahar Group defends that scenario is changing fast and the real estate has undergone a massive change in last one decade. According to her, there has been greater transparency and considerable awareness among the home buyers. Therefore, it cannot be agreed completely that consumer connect is a missing link and the developers refuse to show the approvals.  In fact, of late, social media and digital project promotions have effectively improved the transparency.

“There is a slight gap that exists due to certain conditions such as perception and lack of understanding on various facts which are beyond the control of the developer. These conditions will include lack of necessary infrastructure, complex real estate regulations etc. Consumers are less aware of the formalities and rights involved while purchasing a property. But these flaws can be overcome by creating better awareness among consumers,” says Yagnik.

However, Nikhil Hawelia, Managing Director of Hawelia Group admits that this is a prevalent market reality where the developers simply refuse to entertain the home buyers who ask so many questions. The idea is to simply have only that kind of buyers who could be handled easily. Since the market continues to be sellers’ market, most of the needy buyers just succumb.

“When I myself volunteered to showcase all the approvals and legal title to my home buyers in Greater Noida West they were all surprised. They had been witness to an altogether different kind of market reality. But in hindsight today I can say that those buyers have stood with me, even when the project was slightly delayed. As a matter of fact, some of them became my repeat customers as well,” admits Hawelia.

This any way is more of an exception than the market reality. The prevalent mindset of the builders is that why to entertain so much to the buyers and make them even more demanding. As a developer sums up the discussion, while requesting anonymity, “the more you try to be open with the buyers, the more they get demanding. We as the developers do not want one more party to arm twist us, as already the development authorities keep us pushed to the wall.”

No wonder, the homebuyers are not impressed with the poor consumer connect and opaque dealing of the developers. They are increasingly questioning their callous attitude and their frustration is vented out through protests and court cases. 

By: Ravi Sinha