By Vinod Behl
In a bid to push up sales and generate revenues, debt- ridden, cash- strapped developers struggling to clear huge inventories of homes have resorted to select, customised and innovative marketing initiatives.Judging from their considerable success , these marketing trends will continue to be the flavour of 2016.
Breaking price barrier
For the last couple of years, high property prices, coupled with high interest rates, totally slowed down sale of housing units across India, resulting in piling up of huge unsold inventory.
That non- affordability had been a key reason for muted sales was quite evident in view of high demand for affordable homes.As per market statistics, 7000 affordable housing units got launched in Q1 2015-16, over three times from the same period last year. And about 60 percent of this demand was from speculative Delhi-NCR market where prices were artificially inflated in last few years. Credai- Cushman &Wakefield survey forecasts demand for affordable houses(with prices up to Rs 20 lakh excluding Mumbai), rising to over 5 lakh units across NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Pune.
Since in the last few years, developers did not make efforts to launch houses in truly affordable range(within 20 lakh), the net result was drastic drop in sales, leading to piling up of huge inventories which according to Knight Frank report, rose by about 13 percent in the June quarter last year. Taking a lesson from this situation, which made going tough for debt-ridden, cash- strapped developers, many developers took initiatives to create & launch genuinely affordable homes.NCR’s leading developer, Amrapali Group, in association with marketing firm, Investor Clinic, launched a novel scheme of Adarsh Awas Yojana for retired and in-service government employees.Under this scheme in Greater Noida West, 5000 affordable flats were offered with 895 sft flat costing Rs 22 lakh.After overwhelming response ,selling 3000 flats in three weeks, the price has been further reduced to Rs 20 lakh, besides a number of flats on offer have been doubled to 10000.
Under Haryana government’s ‘Affordable Housing Scheme’, a number of NCR developers offered 1BHK & 2BHK houses in Sohna (South of Gurgaon) at all inclusive attractive prices of Rs 13 lakh & 18 lakh respectively.The concept of time correction under which a developer sells stock at the old price, also gained ground. Raheja group offered Aranya Independent Floors in its smart green city project on Sohna Road, Gurgaon for less than Rs 2500 per sft.Taking a cue, Gaursons, is planning to launch affordable homes in New Year in the price range of 15- 20 lakh, with sizes varying between 450- 750 sft.
In a marketing initiative of its kind, a Mumbai developer, came up with a scheme , offering homes in a far off suburb at Rs 6.3 lakh with a sweetener in the form of a free helicopter joy ride and job for one female member of the buyer’s family.
Till such time the huge unsold inventory of homes gets absorbed, the prices will remain muted and home buyers will continue to get benefit in this new year, especially in affordable category.
Compact size homes
In another major marketing initiative to woo price- sensitive home buyers, many developers who otherwise could not reduce the apartment prices, have of late come up with the idea of shrinking apartment sizes in order to reduce ticket size(lower price) Leading budget home developer of Bengaluru, VBHC ,came up with Palmhaven project near the city with two types of I BHKs and four types of 2BHKs in sizes ranging from 430- 900 sft.Assetz is launching a project in North Bengaluru in sizes ranging from 395-1000sft and prices from 25 lakh and above.In Gurgaon, Suncity has launched over 600 2BHK units of sizes 518-532 sft with prices of 21 lakh and above.
One bed room homes have been trimmed to 400 sft from 550-600sft.According to JLL report, builders have reduced average flat sizes by 26 percent, with Mumbai Metropolitan Region seeing the highest size shrinkage of 26.4 percent with Kolkata, Bengaluru and Chennai closely following at 24 percent, 23.7 percent and 22.2 percent respectively. This concept of compact homes has been successfully tried for bigger 3BHK homes by budget home developer, SARE. Not just in affordable housing segment, even in luxury segment, Mumbai- based Omkar Developers has successfully tried this concept of multiple sizes homes in its project named, ‘1973 Worli’.
For both cash-strapped developers and budget-sensitive home buyers, this marketing concept of compact sized homes is turning out to be a win-win proposition.
Subsidised home loans
For home buyers it had been a double whammy of high property prices and higher home loan rates that forced them to take back seat, resulting in slowdown in home sales. The interest rate cuts by RBI last year provided little relief to home buyers as banks passed on only a part of interest rate cut to consumers. So, keeping this in mind, some developers, especially in NCR which is worst hit in terms of sales, have launched special schemes, offering home loan at subsidised rates. Raheja group came up with a scheme in Gurgaon, offering home loan at 4.99 percent for 5 years. Satya group also gave an offer of subsidised home loan at 6.99 percent for its loxury homes in Gurgaon.Under this scheme, developers themselves bore the interest rate burden from banks in order to lessen the burden on buyers.These schemes will continue to lure home buyers this year.
Attractive payment plans
Considering that home buyers have been hard pressed to pay EMIs in an environment of job insecurity and no or little salary hikes, developers have come up with attractive payment plans which are construction- linked. Many developers across India, are successful in luring home buyers in a big way by offering subvention plans- taking EMI burden on them. The developers have gone to the extent of offering no EMI till 3 years or till the time of possession.Along with this, they have drastically cut down the upfront booking amount to be paid by home buyers to as low as 2-5 percent. As this scheme was liked by many home buyers and developers were able to considerably push up their sales, it’s going to be a big draw this year as well.
Last year saw the rise of online property portals and with that the concept of digital/online home marketing caught up.Tata Housing turned out to be a pioneer in this marketing concept.Encouraged by the success of partnering with Google’s ‘Great Online Shopping Festival’, they not just partnered with leading retail portals but also took to all- new concept of Social Sell, by tying up with Facebook to market their leisure homes in Goa. Portals like Quikr , HDFC.com has been successful in selling homes in partnerships with developers.HDFC is particularly successful in marketing ready-to-move homes. MCHI-Credai’s initiative to partner with leading property portal, Housing.com to launch a Virtual Property Expo which drew a good response.Considering the effectiveness of this online medium in marketing homes, real estate developers are carrying on with this encouraging trend.