Taking up the challenge

Anurag Jhanwar

Life of marketers in the real estate sector has changed drastically post November 8, fighting against an unprecedented scale of demonetisation which has taken away 86 per cent of the total cash supply out of the system. 

While housing is a necessity, given that the ownership involves huge outlays and typically a long term (15-30 years) leverage in the form of housing loan, the customer is extremely cautious and goes for the final plunge only after he/she is assured of financial security, value for money, optimum quality and minimum risk of delivery.  The 50-day period post demonetisation has tested some of these aspects directly or indirectly.

The above got further aggravated with speculations of falling prices by 20-30 per cent and a drastic reduction in interest rates complicating the market dynamics. A marketer at this juncture would find himself perplexed owing to complex  buying sentiments that came to the fore in the form of fence-sitters. They expect events unfolding to their advantage in future.

The current low sentiment calls for regular communication and assurance from the marketers to allay their concerns and make buyers feel comfortable to buy their dream homes. 

What buyers need to know

However, at this juncture, it is equally important for the marketers and the sale representatives to educate the potential buyers and address their concerns through rational explanation. Some of the important points that are worth deliberation are as follows:

• Cost of construction and approval has only increased over the years. However, the average price increase has not even beaten the inflation. Thus, margins are much lower today and ability to pass on huge discounts is limited
• End users should make the best use of the opportunity as developers are providing offers — both freebies as well as financial schemes lowering the overall cost for buyers. These deals would commensurate to a 5-10 per cent discount already
• Depending upon immediate consumption to expected delivery after 2-3 years; buyers have an option to go for either ready to move in property or under-construction property. Today there are attractive options available in both the segments which can be further sweetened if the buyer is genuinely interested
• The real estate sector is going through a lot of regulatory changes —  RERA and Benami, which possibly would impact the supply in the short-medium term. The cost of compliance owing to regulatory changes is going to increase, which with time can be loaded to the price. So, both desired inventory and pricing will be little tough as we move forward
• Interest rate cuts have already been affected - upto 50 basis points, something which provides huge savings on the EMI (either through reduction in EMI or tenure of loans), which makes the case compelling for genuine buyers to take the plunge
• Genuine developers need to highlight the risk of delivery on account of opting for projects of developers who do not have financial tie-ups or have been unable to sell. While buyers will be enticed by the offers and discounts, they should take reasonable care so as not to fall for it at the risk of delivery

The tide over the last couple of years has been turning in favour of consumers and demonetisation and upcoming reforms such as RERA, GST, Benami Transactions Act are only going to add to the speed and bring consumer to the fore. A segment flooded with unwarranted brochures, emails and SMS could benefit by aligning itself with strategies that benefit individuals and communities for the greater social good. Today each marketer has to put customer at the core of their marketing activity and direct their campaign towards each of the perceived pain points. Providing real-time construction updates through apps could garner greater trust in a developer than those who are willing to hide facts. 

Sponsoring green initiatives in the locality are likely to increase the commitment ratings of a developer. An overhaul of marketing campaigns with a goal to improve credibility of developers, focused construction to improve delivery timelines and quality of construction should be top priority of the developer to sustain in the changing and complex market conditionswhen customers areexamining them more closely than ever.

— The writer is MRICS, Business Head - Consulting and Data Insights, PropTiger - Makaan.com

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Beating the low sentiment

At present the focus is  towards addressing the issue of property prices and fall in interest rates. Some of the measures that developers have taken to keep up the sales levels are: 

Addressing speculations: Most purchase decisions are being delayed because potential buyers feel that there is advantage in waiting.  This is where developers have come forward and are offering price assurance guarantee, rental assurance and buyback schemes. This manifests developers confidence and the future outlook about the project. For example, Runwal Group, Citrus Ventures, Lodha amongst others have offered price assurance schemes for their respective projects. 

Lower interest rates: With the prediction of interest rate cuts on account of excessive liquidity entering into banking system, buyers are also waiting to avail of this benefit. This is where developers tied up with financial institutions to offer attractive interest rates.For instance, ATS Infrastructure is offering home loans at 7 per cent. Unishire is also offering home loans at 6 per cent and 'Book Now, Pay after Three Months' scheme with no cancellation charges on its ongoing properties in Bengaluru for first three years only.

We might need to wait to see the real benefit of these schemes. Developers have tried their best to bring the best on the platter and their efforts call for applause. 

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IREO announces tie-up with GRIHA

India’s first and largest real estate private equity firm, IREO has announced its collaboration with the GRIHA Council for implementation of the Green Building concepts and the GRIHA Rating variants for IREO projects. IREO has already registered about 8 million sq ft building footprint with GRIHA Council and is in process of registering an additional footprint of 2 million sq ft.

Under this collaboration, IREO is committed to obtain GRIHA rating for its significant upcoming and future projects. As part of the MoU, GRIHA Council will be helping IREO in setting up a project implementation unit for executing GRIHA Certification and shall work with the group to maximise awareness and outreach on green initiatives through publicity campaign, marketing, collaterals and dedicated link to GRIHA Council website. IREO along with collaboration of GRIHA Council shall establish a review committee to monitor and provide guidance for smooth implementation of the green building initiative.

Speaking on the occasion, Pankaj Dugar, CEO, IREO said, “IREO’s vision of multiplying quality of life revolves around a few key principles of environmentally sound and sustainable development like conservation of resources, design for minimum waste, energy efficient buildings including use of renewable energy such as solar, prevention of pollution and use of futuristic technology such as automation, etc. This collaboration with GRIHA will reinforce this commitment and helps us benchmark against the highest national standards”.