News Point: Track2Realty pan-India survey finds that the home buyers’ satisfaction index has touched all time low while the developers are yet not ready to change to professional practices.
It may not come as a surprise in a subdued environment that the satisfaction index of the home buyers is all time low. The common belief among the buyers is that the slowdown has not changed the industry practices. The developers continue to operate the same way assuming that once the market conditions improve the buyers have no choice but to buy a product that is need-based.
A majority of Indians across the country are extremely apprehensive with the property market. In a challenging year their overall satisfaction level has gone down and, as a matter of fact, it is continuously slipping down in the third consecutive year. On a scale of 0-1000 where the benchmark has been set on a number of parameters including the market conditions, developers’ commitment & home buying experiences, the satisfaction score is as low as 272 this year, compared to 358 last year and 373 a year before.
Home buyers’ satisfaction index
- On a scale of 0-1000 the satisfaction score is as low as 272 this year, compared to 358 last year and 373 a year before
- 54% home buyers are extremely dissatisfied, 28% are dissatisfied only 10% are satisfied, and 8% are not sure
- Top reasons of home buyers’ dissatisfaction are lack of transparency, charging hidden cost, one-sided builder-buyer agreements, lack of communication in case of delay, mismatch in showcased sample apartment and the one delivered, and after-sale facility management
- 68% think greed of the developers is behind the prolonged slowdown, 26% suggest reduce the prices, and only 6% feel it is economic cycle that is responsible for slowdown
- 38% rate delivery timelines first priority, 36% say promises fulfilled, 14% want communication and only 12% are convinced with the financial strength of the company
- 42% feel hidden cost as worst nightmare, 36% dislike escalation clause, and 22% disgust penalty
In terms of the level of satisfaction, more than half, 54 per cent, are extremely dissatisfied with the real estate market; another 28 per cent are dissatisfied; while only 10 per cent are satisfied with the way real estate functions; and 8 per cent are not sure or do not want to comment.
Among the top reasons of homebuyers’ dissatisfaction are lack of transparency, often resulting into charging hidden cost; one-sided builder-buyer agreements; lack of communication in case of delay; mismatch in promised sample apartment and the one delivered; and after-sale facility management.
These are the findings of India’s largest homebuyers’ psychograph survey by Track2Realty, real estate thinktank group, to assess the public perception about the Indian real estate and its standing as a business. The survey has been conducted for the third consecutive year in 10 cities – Delhi-NCR, Mumbai, Kolkata, Bangalore, Hyderabad, Ahmedabad, Chennai, Pune, Jaipur and Chandigarh – between October 5 and October 12.
“We read in the media that in a slow moving market the developers have gone extra mile to connect with the home buyers. The reality, on the contrary, is that the consumer connect is still missing in the sector. This absence of meaningful dialogue clearly shows how developers are taking the buyers for a ride,” says Rajat Mehta in Mumbai.
“Judicial intervention and media trial in recent times is welcome but those headlines are about a few exceptional cases. In majority of the cases the buyers have no choice but to wait endlessly for project completion. Once the project is completed, the construction quality and facility management for next few years is something about which one can only crib. Nothing has changed on the ground to trust this sector,” say Aditi Mishra, a home buyer in Gurgaon.
Facts speak for themselves. In a market where the developers are reeling under debt burden and the liquidity crunch, the level of trust deficit on part of the homebuyers is so high that a majority, as many as 68 per cent think the greed of the developers is behind the prolonged spell of slowdown in the market.
26 per cent even suggest that instead of waiting for the economic revival and serving the interest on the debt, if the developers reduce the prices they can sell the inventory; something that will enhance their credibility as a developer. Only 6 per cent feel that it is the economic cycle that is responsible for slowdown and the developers can’t do much about it.
The fundamental question that this survey asked the home buyers is which is the one factor that shapes the public perception in favour of the developer or against them. Close to one-fourth, as many as 38 per cent, rate the delivery timelines, nearly as many 36 per cent say promises fulfilled, while 14 per cent look for communication at every level. Only 12 per cent are convinced with the financial strength of the company as a brand driver.
This also raises a question as to what is the worst factor in terms of the consumer experience. Indians think there are three grey zones that turn the buyers off the developer- hidden cost, escalation clause and penalty clause. 42 per cent blame the hidden cost with the apartment as the worst nightmare; 36 per cent think the escalation clause is the arm-twisting mechanism of the developer; and 22 per cent blame that even the penalty clause is heavily loaded in favour of the developer.
What makes the home buyers wary with a brand in terms of sales methodology? Nearly half of the homebuyers, as many as 48 per cent, maintain that developers’ arm-twisting with the CLP (Construction Linked Plan) is what turns them off. While some of the developers simply do not entertain the CLP advertised in their sales brochure, others ask for as high as 40 per cent in advance with this plan. 32 per cent call it a bad experience when a broker (under-writer) offers apartment at lesser price than advertised by the developer. 28 per cent find buyback guarantees and assured returns clear signs of developers’ financial stress and desperate marketing strategy.
