Responding to the sharp slowdown in the real estate industry where supply has started to outstrip demand, DLF that rose to fame by creating the capital’s suburb Gurgaon, is experimenting with a new plan to draw in buyers.
The biggest listed realty company has finally cut prices in Gurgaon, or has it?
Well, on Thursday it told customers that the basic sale price of apartments was being cut by 5 per cent, though in truth all it did was increased the size of the apartment by 5 per cent. Besides, customers will be given a further 10 per cent discount for making timely payments for a construction-linked plan. To top that, if the project is delayed, DLF will pay out more to customers as penalty. Deven Choksey, Analyst at KR Choksey Securities, said, “Bankers are feeling comfortable lending money to real estate companies. Upto now a situation of no money coming their way has probably gone for good and probably better days are ahead for some of the companies.
While getting more for the money is great news for homebuyers, the disguised mark down for Gurgaon hardly compares with the actual price cuts the firm offered for flats in Chennai and Bangalore. Those cuts helped bring down the payments for homebuyers.
It is this cut in prices that is expected to stoke fresh demand from new buyers. Companies like Omaxe, for instance, are looking to address the affordable housing segment, with much smaller flats than DLF makes, and they are hoping that it will hit the sweet spot in the market.
Meanwhile, Macquarie has estimated that demand for residential apartments across India is down 25 per cent. Stock prices have corrected nearly 80 per cent since January last year and analysts expect that prices will bottom out by the end of the year, after which buyers might need less to entice them.