18th January 2017 - Developer Moves in a Stagnant Market - Residential - Gurgaon
When the going gets tough the tough get going. The strongest of developers adapt as the market adapts.
In Gurgaon's real estate market the story is no different. With primary sales not at their best during a down phase cycle, real estate developers are adapting their strategy and value propositions in order to attract customers and drive sales.
One instrument that has been used fairly commonly by developers all across the board in the primary market is to offer easier payment schedules that is less payment upfront and a time linked plan beyond that. Others are pushing subvention plans.
In terms of marketing, the top developers ventured out of the country in the first half of 2016 to take their products to customers – HNI basically. So a push rather than pull marketing tactic was used. Also they ventured into domestic territories in order to tap into well placed business class investors across certain key geographies where the catchment potential was larger. Still a hard market to do well in.
Then some developers launched projects in collaboration with other developers or JV format lending their just their name and guidance on certain projects. Prospective buyers would be well advised to think twice before investing in such developments as execution delivery is still a problem until RERA comes into effect.
I read an article in the newspaper just today whereby the Centre has warned states of diluting provisions of RERA in their incorporations. This strong mindedness of the government is truly appreciated and a strong RERA acts in states is a must if we are to move to more transparent and structured markets.
Finally, in the second half of 2016, a couple of developers tied up with online firms during festival seasons to drive sales and claim to have done well as also tightening their CRM departments in terms of informing customers of construction milestones achieved and plans ahead.
Specifically, in terms of projects we're only promoting DLF Crest and Camellias in the premium and super premium end segments as far as primary sales go. This is after having seen quality levels achieved at Park Place in the premium segment and Magnolias and Aralias in the super premium segment. DLF has won accolades for Magnolias as the finest luxury residences in India and Asia Pacific and seem determined to deliver on time and with quality.
End-use sales are more the order of the day than investment driven sales given the market we are operating in. However, investors with medium to long term expectations in such projects are encouraged. Interesting to see how the primary and secondary markets behave in 2017..
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