A majority of Indians across the country are extremely apprehensive with the property market and feel that in spite of the slowdown, the industry’s practices have not changed.
- On a scale of 0-1,000, the satisfaction score, which measures several parameters including the market conditions, developers’ commitment and home buying experiences, was as low as 272 this year, compared to 358 last year and 373 a year before. Home buyers believe that developers continue to operate the same way, assuming that once the market conditions improve, the buyers will have no choice but to buy a product that is need-based.
- In terms of the level of satisfaction, more than half (54%), said that they were extremely dissatisfied with the real estate market, revealed the survey by Track2Realty, a real estate think-tank group.
- Another 28% said they were dissatisfied, while only 10% were satisfied and 8% were unsure or did not want to comment.
- The survey was conducted in 10 cities – Delhi-NCR, Mumbai, Kolkata, Bengaluru, Hyderabad, Ahmedabad, Chennai, Pune, Jaipur and Chandigarh.
Home buyers’ top complaints
The top reasons for home buyers’ dissatisfaction include:
- Lack of transparency, which often results in hidden costs.
- One-sided builder-buyer agreements.
- Lack of communication in case of project delays.
- Mismatch between the sample/promised apartment and the one delivered.
- Problems pertaining to after-sale facility management.
While judicial intervention and the media’s role in recent times, are welcome developments, they only pertain to a few exceptional cases, says Aditi Mishra, a home buyer in Gurgaon.
“In a majority of the cases, the buyers have no choice but to wait endlessly for the project’s completion. Once the project is completed, the construction quality and facility management over the next few years, also remain sore points for home buyers. Nothing has changed on the ground, for buyer to trust this sector,” laments Mishra.
“We read reports that in a slow-moving market, the developers have gone the extra mile, to connect with the home buyers. The reality on the contrary, is that the consumer connect is still missing in the sector. This absence of a meaningful dialogue, clearly shows how developers are taking the buyers for a ride,” concurs Rajat Mehta, in Mumbai.
Should the slowdown result in a price correction?
- A majority of the respondents (68%) blamed the developers’ unwillingness to reduce property rates, for the prolonged slowdown in the market.
- 26% even suggest that instead of waiting for the economic revival and serving the interest on their debt, if the developers reduced property prices, they could sell the inventory. This would also enhance their credibility, they felt.
- Only 6% felt that the slowdown was part of the economic cycle and that developers could not do much about it.
- When asked to identify the most important factor that shapes the public’s perception towards a developer, as many as 38% felt that it was a developer’s commitment to delivery timelines.
- Nearly as many (36%), said that it depends on fulfillment of promises, while 14% looked for communication at every level.
- Only 12% were convinced that the financial strength of the company, drives its brand image.
Payment plans and hidden costs
- In terms of grey zones that turn the buyers away from a developer, 42% felt that the hidden costs in an apartment, were the worst nightmare.
- More than one-thirds (36%), felt that the escalation clause was nothing but arm-twisting by the developer, while 22% thought that the penalty clauses were heavily loaded in favour of the developers.
- In terms of sales methodology, nearly half of the home buyers (48%), were turned off by the developers’ arm-twisting tactics over the construction-linked plan (CLP). Buyers complained that while some developers simply do not entertain the CLP advertised in their sales brochure, others ask for as high as 40% in advance, with this plan.
- 32% call it a bad experience, when a broker offers an apartment at lesser price than advertised by the developer, while 28% find buyback guarantees and assured returns, as clear signs of the developers’ financial stress.
Home buyers’ satisfaction index
(The writer is CEO, Track2Realty)