Business

Realtors’ novel strategy to woo flat buyers

CHENNAI: Given the current global economic slowdown and its impact on the Indian economy, real estate developers have hit upon novel marketing strategies to woo reluctant flat buyers.

Real estate players such as Mantri Synergy, Jains Sunderbans, ETA Rosedale and Hirco Palace Gardens have come out with new schemes to attract buyers.

In what is seen as a clear move to shore up the ‘sagging morale’ of prospective buyers, property developers have now come forward to pay pre-EMI (equated monthly instalment) interest on part-money disbursed on the housing loan taken by a flat buyer.

“Given the current situation, builders are taking a conscious decision to bear the interest burden of the consumer,” Prakash Challa, President, Confederation of Real Estate Developers Association of India (CREDAI).

In the current tight liquidity situation, developers find it difficult to raise finances. When one buys a flat on mortgage, the money is disbursed by his/her bank to the developer in stages. This way, the developer gets the money upfront.

This usual practice obviates the need for him to go in for market borrowing to fund his project.

In the changed economic context, the prospective flat buyers have turned cautious and are postponing their buys, anticipating a drop in real estate prices. This has put the developers in a tight corner.

In order to retain the buyer, especially during the slump period, the real estate players are now opting to dish out freebees such as payment of pre-EMI.

“Only few developers are offering this now for their new projects. It seems more developers are set to follow this when they announce their new projects,” according to K. P. Senthil Kumar, Director of roofbird.com, a residential real estate portal and service provider.

This is an added advantage to a buyer as it reduces his/her financial burden to a large extent during the construction phase. This cleverly laid out strategy also helps developers retain price lines in a sliding market.

The builders are also trying to retain their existing customers by giving freebees (like fittings and special flooring) without actually reducing the price.

This is critical, especially in the case of projects where a part of the flats have already been sold and they are trying to sell the remaining at the same price. Is it an indirect way of reducing the price of a flat?

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