Bottom Line: Though the statistics of property sales during the festive season from the major markets of India would be released only by the end of the year, a conservative estimate suggests that the festive season this year has been worse than the last few years.
On the face value the developers are maintaining an optimistic outlook, but privately many of them admit that demonetization, GST and job market uncertainties have collectively spoiled the festive sentiment this time around. Add to it, the developers running short of fresh ideas in how attract today’s discerning buyers, and it seems market is destined to remain flat.
“I had thought of booking my house this festive season but then my expectations and the market forecast of better deals in the market did not come true. Most of the festive offers were just marketing gimmicks or freebies that I am least interested to avail. If the developers did not offer anything substantial during this festive season then there was no point to buy just for the symbolic relevance of festive buying,” says Sonali Agarwal, a homebuyer in Faridabad.
Sonali is not the only homebuyer to feel disappointed with the property market that could not offer any substantial offer worth buying this time around. Since the real estate has been reeling under the prolonged spell of slowdown the buyers were expecting some comprehensive packages to make the festive season count.
It is not that the developers did not offer any marketing packages, discounts or freebies during the festive season this time around. But there seems to be few takers of the offers that read like the advertising copy of the last few years, ranging from price discounts to gold coins & other freebies, and lucky draw to foreign travels.
Last, but not the least, GST free housing was the new catch phrase which meant nothing but a ready to move apartment that does not command the GST. Some developers even offered to share the burden of the GST in the under construction projects. Sadly, none of these offers seems to have worked this time around.
Festive season disappointing
The festive season has been disappointing for the housing market
Discounts, freebies, GST free housing none worked
Discounts nowadays give impression of failed project or hiked price to offer rate cut
Buyers in a distressed economy & opaque realty market looking for safety mechanism
A buy back guarantee or third party audit would have worked wonders
This raises a fundamental question as to whether there is a demand & supply mismatch in terms of what kind of marketing packages the developers are offering and what are the expectations of today’s evolved buyers.
Swati Maheshwari, a brand consultant agrees with this when she says that the developers are distressed but yet living in denial. But the market has changed and the buyer in the property market today is the one who has either burnt his fingers in the past or has learnt from the mistakes of others. You have to be innovative and think out of the box to fit into his wants & needs.
“Problem is that when it comes to festive marketing the developers are too rigid to continue with the traditional format. It is not that easy to make them understand that neither the symbolic freebies will work now nor some substantive discounts. The buyers are skeptical with price discounts too nowadays, with apprehensions of failed project or hiked price to offer discount,” says Maheshwari.
Developers, on record, are not ready to admit it even though privately they share the reality of slow sales during the festive season. Nikhil Hawelia, Managing Director of Hawelia Group reluctantly admits that slow sale is a market reality today. He nevertheless has a justification as to why the developers are not responding to the changing market dynamics.
“It is a slow market and cash crunch is restricting the developers from marketing campaigns. This year the marketing campaigns were least and budget constraints forced everyone to spend less. In such a market I don’t think the developers will show the courage to experiment with the new marketing formats, even though there is a gut feeling that innovative and out of the box ideas will work,” says Hawelia.
Most of the brokers active in the major property markets of India point out that the buyers in this festive season are on the lookout for value additions and safety mechanism. Many distressed property markets across the world have experimented with buyers’ comforts to bounce back. Had the Indian developers learnt some of the global lessons, they would have also made the festive spirit count with their disruptive marketing strategy.
Since market correction is the prophetic statement across the media, a buy back guarantee in case of market crash beyond certain threshold is what would have sold like a hot cake.
Similarly, in an opaque real estate market, innovative ideas like third party audit on the construction quality at the expense of builders would have worked wonders for the buyers.
Unfortunately, the Indian developers continued with their tried & tested marketing mantra of discounts & freebies. That seems to have failed to excite the homebuyers this festive season.
By: Ravi Sinha