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SG Indian developers roll out incentives to draw buyers

Property Here - Tuesday, November 12, 2013

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The festive season in India saw property developers dangle several incentives such as free holidays to Bali and cars to attract home buyers amid a market slowdown.

Given the country’s slowing economy, high interest rates and unsold housing stock in key cities, property prices in India have been falling in 22 out of 26 cities monitored in a recent survey between April and June, revealed data from the National Housing Bank.

“This year, the residential real estate markets are slow in many cities, and are reaching a stage where only hard discounts will achieve any significant extra momentum,” noted Anuj Puri, Chairman and Country Head of Jones Lang LaSalle India.

“Freebies and schemes are the last line of approach for many developers - if these don't work, they will have to mark down their prices to catalyze more sales.”

The country’s festive period which includes the recent Hindu festival Diwali, is usually the peak period for home sales.

As a result, Mumbai-based developer HDIL tried to attract customers by offering free holidays to Malaysia, cash discounts and a chance to win a Mercedes. At the same time, Puranik Builders drew buyers by promising holidays to Spain and Bali. 

“Offering freebies is a time-honoured marketing tactic used by many Indian developers to encourage sales during the festive period, which is more or less ‘peak season’ for the residential property market,” Puri said. 

“Close to one third of a developer's inventory tends to get cleared in this period alone; freebies and innovative financial schemes are seen as a way of upping the ante,” he added.