March 16: Cash back till possession is the new selling point of that condo you wish to own but have postponed buying in the hope of a better deal.
Seeking to drum up sales in a sluggish market, developers in Calcutta have started offering direct cash benefits to prospective home buyers. At least two top developers have come out with never- before schemes like cash back every month till the time of possession and interest on advance payment of the final instalment.
Shapoorji Pallonji, the Mumbai- based infrastructure and real estate company, has just announced a “limited- period” offer of a fixed amount every month till possession for anyone who buys an apartment in its mid- segment Howrah project.
Venkatesh Gopalkrishnan, president of business development and chief investment officer at Shapoorji Pallonji Real Estate, said buyers would get between Rs 5,000 and Rs 7,000 per month depending on the size of their apartments. “We are trying to help buyers, most of whom are first- time home owners, with their financial requirements till the time of possession. It is also a way of assuring them that Shapoorji will deliver the project on time.” Venkatesh would not officially call it a cash back scheme, though. “This is a unique scheme that we have launched only for this project.
“Our idea is to encourage buyers to come forward. Obviously, this should also positively impact sales,” he said.
The Hiland Group’s strategy takes a different trajectory.
The company has offered interest at double the market rate if a buyer in one of its signature projects makes the full payment for an apartment ahead of schedule.
Hiland has sold more than 90 per cent of the 5,300 units in its riverside project in Batanagar and most of the buyers have already paid 80 to 90 per cent of the value of their apartments. The company is encouraging these buyers to pay the remainder of the apartment cost in advance against an interest that banks cannot match.
“If buyers pay their final instalments now, we will pay them interest at the rate of 12 per cent annually on the advance payment. This is a win-win for us and them. The buyer gets nearly double the bank interest rate (6-7 per cent, depending on the tenure) and the increase in cash flow helps our business,” said Nandu Belani, director of Hiland Group.
Belani said one phase of the project would be completed by September and the rest by March next year.
A buyer is usually required to pay the final instalment at the time of getting possession of the apartment.
Calcutta’s real estate market has yet to tide over the impact of demonetisation, which had slowed down sales. Many prospective buyers have been postponing their purchases in the hope of price corrections and a further reduction in home loan interest rates.
Shapoorji’s 30- acre project in Howrah includes 850 condos in the first phase. Around one- fourth of the units have been sold.
Since the company has promised to deliver this phase by early 2020, buyers of even the smallest apartments stand to gain up to Rs 1.8 lakh over three years, which translates into a seven to eight per cent discount on the price bracket of Rs 22- 25 lakh.
For the larger two and three- BHK units, buyers could get around Rs 2.52 lakh if they book now. The effective discount is 5.5- 6.5 per cent on a price point of up to Rs 45 lakh.
Shapoorji has also lined up a price assurance scheme that gives buyers an investment cushion if the cost of their apartments drops before possession.
Some city based developers like Siddha and Merlin have already announced similar schemes.
Source: The Telegraph