These offers come as the actual residential home sales are yet to pick pace. Experts from the real estate sector said though project enquiries have increased, the market sentiments are still muted.
PUNE: From bikes, cars to furniture and consumer durables up to Rs 10 lakh, developers are showering freebies on homebuyers to clear their inventory this festive season.
These offers come as the actual residential home sales are yet to pick pace. Experts from the real estate sector said though project enquiries have increased, the market sentiments are still muted. “With no concrete data to rely on, the freebies are an indication that the developers are finding it difficult to liquidate their stock,” they said.
“There is an underlying stress in the market, but it is not possible to quantify it because of the absence of any clear data,” Rohit Gera, managing director of Gera Developments, said, adding, “This is Diwali season and fair bit of enticement helps the developers.”
He said such gifts are doled out even during good times in a “competitive market.”
However, according to ratings agency Crisil, the realty market is in a phase of prolonged slowdown. While it did not give city wise decline, the agency said absorption of new homes in top 10 cities (Pune included) has slipped by 8% each year since 2011.
The agency said one of the major reasons for this is investors staying away from realty purchases as prices have stagnated over the last few years. It said people are also preferring to stay on rent.
“The sector has witnessed a decline in area booked and area launched over the last few years. Developers have been majorly focusing on mid-category/luxury/premium housing projects. This has created a wide gap in demand-supply dynamics, resulting in pent-up demand for affordable housing units and a huge unsold inventory of unaffordable units across most micro markets,” Crisil said in its report.
In a sad news for those looking for a respite, the agency forecasted that “any respite is unlikely in the near future”.
Various reports have pointed out to lower launches this year, so far. The developers are seeking to meet the lower demand by keeping prices constant (not reducing it). Some of these reports have also pointed to low overall sale.
But do freebies work? Developers said they help in bringing in the fence-sitters.
“Freebies generate a lot of enquiries. They help not only one developer in a specific area, but also others in the vicinity by getting more people to the sites,” Vineet Goyal, joint managing director of realty firm Kohinoor, said.
He said if there were 10 flats getting sold in the market prior to Diwali in 2016, it has now come down to 7-8 now. “The decision-making time has increased now,” Goyal added.
So, is the freebie priced into the selling price? While it will depend on individual developers, generally people can get a like discount if they do not want the freebie.
According to Gera, people should still do their due diligence by checking the progress in work, among other things, before getting drawn in by the freebies.
The experts also seconded this observation. “Buyers should not get swayed by offers. People need to carry out a thorough check of the builder, his market reputation while also looking at various legal angles,” they said.
Court rules developer cannot build further on amenity space of Gera Emerald City in Baner
Residents of the upscale Gera Emerald City in Baner have scored yet another victory in the Bombay High Court (HC) in an ongoing case against Gera Developments Pvt Ltd. In an order that came out on March 1, the HC ruled that the developer in question cannot construct any further on the open space of the plot, and also cannot create third party rights.
The residents, who occupy two buildings, have come together under the banner of Gera Emerald City Baner Condominium, and have been fighting this bitter legal battle for two years now. At the heart of controversy is an upcoming building, named Affinia, being built by the same Gera Developments. Residents have been arguing that the land on which the new building is coming up is their designated open amenity space, and not something the developer can use to build yet another structure.
The developer, on other hand, has been vehemently denying this on the grounds that the residents of Gera Emerald City were never promised the land parcel on which Affinia is being built.
Justice R G Ketkar, who was hearing the case in the HC, remarked that the entire issue was over whether the developer “has conveyed the transferred land, admeasuring 14,788 square metres, as described in Schedule 1A to 1E as contended by the plaintiffs (residents), or land admeasuring 9,150 square metres, as contended by defendant No 1 (developer)”.
After hearing both sides, Justice Ketkar concluded that the developer, at the time of selling the flats to the residents of Gera Emerald City, had recovered the cost of homes as well as the land. The same was recorded in the Deed of Apartment of April 19, 2010, between the residents and developer. “It is not in dispute that Schedule 1A to 1E is forming part of the Deed of Apartments dated April 19, 2010. It is also not in dispute that the area covered under Schedule A to Schedule E admeasures 14,788 square metres and not 9,150 square metres,” the judge ordered.
Some buyers in Affinia had also moved HC seeking relief. They had told the court that owing to this dispute between Gera Emerald City residents and the shared developer, construction of their building had come to a standstill, adding that they have been “vitally affected” by this halt. They also argued that most of them had taken loans from financial institutions to buy their respective homes. Justice Ketkar, however, did not grant them any relief.
Rohit Gera, managing director of Gera Developments, told Mirror, “We have received the order on Wednesday. The matter is being currently studied by our lawyers. A suitable further course of action will be decided accordingly.”
Residents of Gera Emerald City were handed possession of their homes in 2008. Sometime in 2014, they noticed construction activity “in the open space and amenities space of the layout”. Soon, they found that the developer was constructing Affinia, a luxury tower on the space that they believed to be theirs. Initially, the residents took up the matter with the developer and then filed complaints with Pune Municipal Corporation (PMC). Eventually, in 2015, they approached the civil court, arguing that the entire plot was theirs. But, the developer maintained that only 9,150 square metres was meant for Gera Emerald City. The civil court ruled in favour of the residents, after which the developer appealed in the district court. Subsequent litigations reached the HC. Now, the case will be heard by a trial court in Pune to determine a further course of action. Meanwhile, PMC had last year issued a stop-work notice to the developers regarding Affinia.