What comes in your mind when you read/hear the word -SALE?
Clothes, accessories, vehicles, mobile phones...the list might be unending. But can you think of a property being offered on SALE. Starting today till 28th June the online property selling website 99acres.com, with digital marketing firm Amura Marketing Technologies Ltd, is organizing the Indian Realty Flash Sale (IRFS). Properties worth Rs 20-25 bn will be put on sale. It is also reported that more than 50 developers including big names like Tata Housing, Godrej properties, Shriram properties, Sobha Developers and the like have also registered to sell properties at discounts up to 20%. So for the real estate investors and home buyers this could sound as mouth watering deal. Of course we all are aware of high pricing in this sector.
Will investors really benefit from such purchases?
An article on Business Standard highlights the discounts offered might not necessarily be straight reductions in the selling prices. While some developers will offer free stamp duty and registrations, others could offer free parking spaces. Some might waive off floor rise and so on. There will be no transaction taking place when the buyer shortlists the property online. Only a coupon code will be allocated specifying the discounts on short listing the property. Post this event that is after 28th June, the buyers will have to take this coupon code to the developer to avail the offer and book the property.
So should one buy real estate the way one buys garments and accessories in flash sales?
Investors should note that there is a dearth of property sales happening right now. Indeed, home sales have been quite slow in the country since some time. But the fact remains that because of poor disclosures, lack of corporate governance, opaqueness and builder-politician nexus property prices have been artificially propped up at abnormally high levels.
Freebies or discounts are something which attracts most of the human beings. But for such an investment decision where many people tend to give away all their savings to buy a house any step should be taken with utmost care. This is particularly true since inefficiencies continue to rule the roost in this sector. Hence, for investors it would be wise to not get driven away by such offers and any decision should be taken with due diligence.