Buy a house, get a BMW car for free in India
Housing loan linked subprime crisis led to current state of economic slowdown in the United States and its contagion has spread all over world.
The Indian real estate sector grew very rapidly in last few years and demand for office, commercial and industrial space increased exponentially. But after soaring prices for all these years property became unaffordable for many real buyers. Curretly Indian real estate sector is going through a big slump. Property developers have registered big losses and their stock are being hammered down. India's biggest real estate company DLF lost its share prices by 76%. Economic recession has reduced the demand for developed property.
So to lure customers Indian real estate companies are using various techniques. Real estate companies are giving tempting offers to buyers. One real estate group is giving free BMW car to customers who buy its luxurious flats in suburb of Delhi. Not only you will get free BMW, you will also get free membership to Golf course and social club along with 2 free car parkings there.
Your "dream house" now comes with a free Mercedes or BMW, or at least a few gold coins. In some cases, even a small flat is being thrown into the deal for those eying premium segment bungalows. As a slowdown in the realty sector stares developers in the face, these are some of the innovations they are coming up with to keep buyers interested.
Other builders have started shifting from the premium housing sector and are launching projects in the more affordable range for middleclass buyers.
Are these signs that realty prices will drop in the near future? Assotech CMD Sanjiv Srivastava said, "I wouldn't advise people to wait for prices to drop. If you are getting a property at a good location, bargain hard and close the deal." But Anshul Jain, CEO of the India arm of global property consultancy firm, DTZ, has a diferent take. "Yes, a correction in property prices is on its way," he said.
Many builders said they were now concentrating on the middle segment. Manoj Gaur, promoter of Gaur Sons, said the group had launched projects in Indirapuram in the range of Rs 2,500 per sq ft to suit middleclass buyers.
The promoter of Ashiana Housing, Rohit Modi, said they had started an apartment project at Rs 2,100/sq ft on NH 58 in Ghaziabad. Till six months back, apartments at these places were quoting at upwards of Rs 3,000/sq ft.
Not only this, many developers are reducing the floor size of the flats from 2000 sq ft to around 1,200 to 1,500 sq ft. This translates to a fall in the price of a three-bedroom apartment from Rs 60 lakh to around Rs 30 lakh.
Gaur said though sales of premium segment apartments had been hit, demand for mid-segment housing was okay. A number of projects in mid-segment are being launched in Gurgaon too in the price range of Rs 35-45 lakh.
Fears of a slowdown in the realty sector have been around for the past two years — ever since RBI first hiked interest rates. It all started with the apprehension that the heady rise in property prices between 2003 and 2006 was creating a bubble that could burst with disastrous consequences. Later, RBI further tightened money supply to fight inflation. Now, with the global financial crisis beginning to affect the Indian economy, the outlook for the realty sector does not look too good.
However, Property buyers are adopting a ‘wait and watch’ policy and the cascading impact of the US financial tsunami might be felt on property prices like stocks of real estate companies. They are expecting a much deeper crash in realty prices. Offers such as, waiver of stamp duty and registration charges, free lifestyle home or modular kitchen and free parking, have failed to boost home sales.