News Point: On Akshay Tritiya the developers have woken up to the reality that today’s discerning homebuyer wants substantive discounts and not symbolic gifts & freebies.
When Venkata Parthasarthy went on a house hunt on the eve of Akshay Tritiya he was taken for a surprise. Even though he was conscious of the ground realities of Mumbai property market where freebies on the eve of festive season are an established sales reality, the offer this time made him rather doubt the intent of the developer. Prima facie it looked like a marketing trap.
However, on being probed it was for real. On the eve of Akshay Tritiya this year, many developers seem to have realized that symbolic freebies no longer work in a market like Mumbai where the discerning homebuyers do understand its relevance. It does not give them much in the overall cost & benefit analysis. And hence this time around, they are offering substantive discounts and packaging the marketing offers to make the festive season count in true sense of the term.
“I was wondering whether this is for real. But the developer offered me in writing that they will offer woodwork in the apartment for no extra cost. It is like a discount of no less than four to five lakh. They also had an alternative package where they offered entire bathroom reworked with Jacuzzi fittings and I had a feeling of being spoilt of choices, even though I am conscious of the fact that I am not buying any luxury apartment but a mid-segment housing,” says a jubilant Parthasarthy.
Market Reality
- Days of symbolic freebies over; developers offering substantive discounts
- Discounts are not always in cash; product bundling also works that reduces financial load of buyers
- Market increasingly evaluating cost & benefit of innovative offers
The Mumbai property market has indeed changed. Gone are the days of gold coin, or a lottery that nobody would win or even foreign trips. It is the new face of Mumbai housing where the cost-conscious and discerning buyers are evaluating what is symbolic freebie and what is substantive discount.
Requesting anonymity, the marketing head of a leading Mumbai-based developer admits that the homebuyers are no longer interested even in electrical appliances, like air conditioner etc as most of the buyers either already have it or want to buy it as per their choices. According to him, the sales & marketing team have to collectively get an independent market audit done by a third party to conceptualise the festive offer this time around.
There is undoubtedly a clear realization within the built environment of Mumbai real estate that today’s buyer is very conscious of the overt and covert market practices. And hence, with less launches, pragmatic marketing, innovative packages, product bundling and online brand promotion, it seems the Mumbai real estate developers have suddenly woken up to the reality that the tried and tested marketing mantra in the last over a decade now needs to be changed.
This change of taste and requirement is quite visible in the developers’ offer this year. Some of them are offering product bundling by creating a lot of modern amenities in their projects and are giving exclusive access to the property buyers to these assets. Some of them have tied up with the group buying sites for the purpose where a set of like minded property seekers join together and deal with the developer with their wish list. This also gives the buyers a social neighbourhood of their choice.
Does it mean that discounts & freebies will no longer drive the market in future? It seems so! At least the offers have to be meaningful in future to tempt the homebuyers. The developers also do understand this change of market sentiments and preferences.
Arvin Jain, Managing Director, Pride Group believes as long as freebies and discounts are given in context with properties that are reasonably priced and have good amenities and facilities, they can and do work. That said, it is true that many developers do not employ much imagination while making their offers – many times, they can be outlandish and in fact deter serious buyers and investors.
“Hard discounts usually always work to a given extent, but freebies which blatantly seek to overpower the judgment of knowledgeable purchasers will invariably be ignored. The times when developers are most active in trying to outdo each other with ploys to attract the attention of buyers are usually good indicators of how much pain each of them is experiencing,” says Pate.
Anil Pharande, CMD, Pharande Spaces says offers and freebies must make sense in order to be effective. Developers should not ignore the fact that buyers are looking for true value for their money, not unrelated household articles and free vacations.
“Property purchase is a serious investment and must be addressed as such. In other words, offers to reduce the financial burden on buyers in some manner can and do prove to be effective and should definitely be used in slow market conditions. Buyers are looking for good deals and, apart from open discounts, will try to evaluate how open a developer is to negotiation. Developers should study their marketing strategy well and send the right signals to buyers,” says Pharande.
Although it is too early to say whether such tactics will be enough to reel in upwardly mobile professionals and members of the newly wealthy middle class, but at least a beginning has been made. After all, the scores of empty flats and unsold inventories are challenging the marketing wisdom and strategy of these developers and they seem to have taken Akshay Tritiya as an opportunity to change.
As of now, what is strikingly visible is that free parking spots, gold coin, motorbikes, iPhones or foreign tours that were advertised till recently are passé; now developers are competing among themselves to innovate discounts that could differentiate them in the market. On Akshay Tritiya this year, the Mumbai homebuyers are hence spoilt for choices.
