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COVID-19: Homebuyers ready to invest, provided developers meet these two criteria

COVID-19: Homebuyers ready to invest, provided developers meet these two criteria
A considerable number of potential homebuyers are ready to invest in real estate, provided the home they are buying is complete or at least six months from completion, an Anarock study has revealed.
Anarock surveyed over 1,900 potential homebuyers between the ages of 24 and 67 for the study. Nearly 46 percent of these respondents said they’d be willing to buy a ready-to-move home in these economic circumstances, while 20 percent of the sample said that they would buy a home expected to be completed in six months.
Completed homes are a selling point
This comes as good news for players like DLF that have maintained a healthy ratio of completed-to-under-construction units. “Except for our super luxury portfolio where we offer bare shell units and residential plots, our point of difference is being able to offer ready to move in residential condos in all our projects across India,” said Aakash Ohri, Senior Executive Director, DLF Home Developers Limited.
Other players are in agreement with this succinct shift in consumer behaviour that now favours buying a completed home. “Consumers are now seeing rent as an expense and are considering EMIs as SIPs to build a non-volatile asset, like real estate,” said Prashant Bindal, Chief Sales Officer, Lodha Group. Lodha would know.
The company sold 300 homes during the lockdown, with a large percentage of these sales coming in the ready-to-occupy space. “Our sales performance a testament that buyers are ready to transact where they are confident of delivery and quality,” Bindal added.
Also wanted: better offers
Completion deadlines though aren’t all that weighs in on the mind of a potential homebuyer. Of the 539 respondents in the Anarock study who said they were putting home-buying on hold for up to a year, 37 percent said that they would still consider buying a home if developers were willing to part with better offers.
“Customers are mostly looking for lucrative deals or offers from developers in the future and are ready to take the plunge in the property market,” said the report authored by Anarock’s head of research, Prashant Thakur, “Interestingly, 16 percent of our respondents said they consider current property prices to be the lowest, and that they expect them to only appreciate in the future.”
‘Credibility is the key’
However, this is exactly where some developers say they aren’t willing to give in. “We (DLF) have not extended any special offers or discounts,” said Ohri, “While it may be a challenging time for the industry, we are hopeful that credible developers with a proven legacy to deliver on commitments will have an advantage.”
Whether developers choose to part with offers and discounts or not, new-age marketing like digital home sales, widely practiced during the lockdown, could allow developers some breathing space for discounting. “During the lockdown, there have been a couple of one-off marketing initiatives in residential real estate, which leveraged special offers, including among other options, a major discounting restricted to fixed number of units for sale,” said NAREDCO President Niranjan Hiranandani, acknowledging that offers have had a key role to play in enabling certain developers sell successfully during the lockdown.
“Once these sweeteners are removed, or the fixed number of units are sold, whether the market supports a similar sort of response or whether one would still see the same sort of numbers (homes sold during the lockdown) is anybody’s guess,” Hiranandani added.
DLF to resume construction this week
Discounts or not, developers like DLF are confident of re-starting construction pan-India, at the earliest, especially after the easing of lockdown norms by respective state governments. “We are maintaining a count of over 2,000 workmen across our sites. A few of them are staying in accommodation provided at the site, and a few others within the vicinity of about a kilometre,” said Ohri.
DLF says it is ready to begin construction this week itself, even as these developers have begun training to understand the new norms of working in a post-COVID world, as per government directives. “There may be some movement of workmen once the interstate transportation begins, but we are closely monitoring the situation by motivating them to stay back,” Ohri said.
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