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Ganesh Chaturthi 2024 marks the start of the festive season when several real estate developers and brokers gear up to offer schemes and discounts to prospective homebuyers. This year, however, is less about offers but more about flexible payment plans, especially the buy now, pay later scheme. The idea is to lure more people to take the opportunity to invest in property with the bare minimum amount.
According to property consultants, flexi payment plans were popular during Ganesh Chaturthi last year and have now gained momentum even among branded developers who are offering this option to homebuyers.
What is a flex payment plan?
Flexi payment plan allows potential homebuyers to pay in installments. Homebuyers pay only 10% or 20% initially, and the rest on possession.
This payment plan gained popularity between 2015 and 2019 and was aimed at boosting homebuyer sentiment.
A few developers in Mumbai real estate market have even gone to the extent of allowing homebuyers to move into the apartment after depositing 20% of the cost of the apartment. The balance 80% will be paid in equal installments from the date of getting possession.
“Housing supply across the country, barring Hyderabad and to some extent in Bengaluru, is very slow. This includes Delhi NCR and Mumbai Metropolitan Region (MMR). This is not to say that there is no demand and supply has slowed down, but overall the market is a bit slow,” said Ritesh Mehta, Senior Director, and Head (North and West), residential services and developer initiative, JLL India, a real estate consultancy firm.
“It is due to this reason that the flexi payment offers are being offered by even prominent developers in Mumbai. As many as 90% of new launches offer the flexi payment plan,โ he added.
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Legal experts, however, say that it is always advisable for buyers to opt for a construction-linked payment plan arrangement. In this, the buyer is required to pay the amount to the developer, based on the actual progress of construction. Any scheme offering a discount for upfront and early payment exposes the buyer to greater risk and should be avoided.
Prices remain steady as demand softens in Mumbai real estate market?
Over the last four years, the Mumbai real estate market has witnessed an increase in sales of residential properties, accompanied by surge in launches.
This growth can be attributed to the Maharashtra government’s announcement in January 2021 wherein it waived 50% of the amount that developers had to pay to obtain permissions. In lieu of the benefit, developers had to absorb the stamp duty on behalf of homebuyers.
“These offers by the government and real estate developers helped the real estate projects pick up steam in 2022 and 2023. Itโs now been a year since developers have reintroduced subvention schemes, also known as flexible payment options. This may be because they want to keep up the sales momentum,” said a real estate broker, not wishing to be named.
The softening in demand has also ensured that price rise remains steady, at least for mid size and small developers. Listed and branded developers, on the other hand, continue to increase prices, said experts.
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“Listed developers have increased prices this year but mid-sized and smaller players have kept prices steady. Of the total primary sales (sales in new buildings), around 60% to 70% are by listed or branded players and 30% to 40% are by smaller and mid sized players. This has gained ground in the last six months or one year as homebuyers now trust branded and listed developers more,” Mehta added.
“At our under construction project in Chandivali, where the market rate is around โน30,000 per sq ft this year, we have decided to offer 1 BHK and 2 BHK for โน1.15 crore and โน1.69 crore, respectively, said Mumbai-based developer Manju Yagnik, vice chairperson, Nahar Group and senior vice president, NAREDCO West, an apex body of real estate developers.
“We are ensuring that prices remain stable this year. We are expecting a good response, especially since our project will be ready-to-move-in soon,” Yagnik added.
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Delhi NCR developers also expect sales to pick up during Ganesh Chaturthi 2024
Real estate developers in Delhi NCR also expect sales to pick up this festive season.
“Most buyers invest in residential properties during Ganesh Chaturthi. Developers provide several offers during the festive season,” said Mohit Kalia, vice president- sales and marketing, Raheja Developers.
