The festive season, is usually a time when property sales peak during the year. Although the actual number of sales during this period, from the major markets of India, are only likely to be available towards the end of the year, estimates suggests that this year’s festive season may be worse than the last few years, with developers blaming demonetisation, the implementation of the Goods and Services Tax (GST) and job market uncertainties, for the dull sentiments.
Developers too, seem to be running short of fresh ideas, on how to attract discerning buyers. “I had thought of booking my house this festive season. However, predictions of good deals in the market did not materialise, nor could I find anything that met my expectations. Most of the festive offers were just marketing gimmicks or freebies that I was least interested in. With developers not offering anything substantial during this festive season, there was no point in buying, just for the symbolic relevance of festive buying,” said Sonali Agarwal, a home buyer in Faridabad.
Although developers did come up with marketing packages, discounts and freebies during the festive season this year, most of these were similar to those of the past few years. Consequently, offers of price discounts, gold coins and other freebies, lucky draws and foreign travels, found few takers. ‘GST-free housing’ was another catch phrase, which meant nothing but a ready-to-move apartment that does not command the GST. Some developers even offered to share the burden of the GST in under-construction projects.
See also: Freebies are no longer enough to lure buyers, this festive season
Real estate sentiments during the festive season of 2017
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Mismatch between festive offers and buyers’ expectations
Swati Maheshwari, a brand consultant, points out that this indicates a demand and supply mismatch, in terms of the type of marketing packages that developers are offering and the actual expectations of today’s buyers.
According to her, “The problem is that when it comes to festive marketing, developers remain rigid and continue with traditional formats. It is difficult to make them understand that symbolic freebies will no longer work. The buyers are skeptical with price discounts too, nowadays, as they feel it may be an indicator of a failed project or hiked prices, to counter the discount.”
Offers that may have worked, this festive season
- Most of the brokers in the major property markets of India, point out that buyers are on the lookout for value additions and safety mechanisms. Hence, offering some sort of comfort or guarantee, could have spurred sales during the festive season.
- With the possibility of market correction often being mentioned, a buy-back guarantee in case of a market crash beyond a certain threshold, could have created positive sentiments.
- Similarly, in an opaque real estate market, innovative ideas like third-party audit on the construction quality at the expense of builders, could have enticed buyers.
Limited scope for aggressive marketing, say developers
Developers privately admit that slow sales are a reality during this year’s festive season.
Nikhil Hawelia, managing director of the Hawelia Group, has a justification, as to why the developers are not responding to the changing market dynamics. “It is a slow market and the cash crunch is restricting developers from launching aggressive marketing campaigns. This year, the marketing campaigns were fewer as compared to previous years and budget constraints forced everyone to spend less. In such a market, I do not think that developers will show the courage to experiment the new marketing formats, even though there is a gut feeling that innovative and out of the box ideas will work,” Hawelia explains.
(The writer is CEO, Track2Realty)
Ravi Sinha is a journalist with nearly two decades of cross-discipline media exposure. He is the CEO of real estate think-tank group Track2Realty. He has been writing extensively on the real estate sector for nearly a decade. Evaluation of real estate brand performance is his expertise and he has immense insight into consumers’ psychograph in the property market.
Twitter: https://twitter.com/ravitrack2media
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