Price reduction is not the solution, research by apex developers body CREDAI-MCHI has asked its developer members to focus on product design and characteristics instead.
By Varun Singh
If one thought that post COVID-19, real estate prices will fall drastically, then this might come as a rude shock.
Developers body CREDAI-MCHI research has asked its members to not go for price reduction. Instead it wants developers to focus on product design and other aspects.
Not only price reduction, but it also wants builders to keep margins healthy and not offer unrealistic discounts.
It has asked developers to come up with creative and innovative benefits for the customers.
“Developers should prevent offering unrealistic discounts we need to be united to keep the margins healthy,” reads the research report.
One of the best way to save money, is to reduce marketing spends. The target set for this is to reduce marketing spend till FMCG and automobile sales increase.
Home buyers in coming days may get a lot of calls, because the research has suggested developers to increase use of tele-marketing.
Under the head strategies to adopt, the research suggest builder to be flexible with their ask. “Try and bring the customer to even terms, use spot discounts instead of public announcements.”
Developers should interact with Channel Partners (CP) to get Pulse of market. But at the same, they have been asked to not encourage if CP’s are being opportunistic about brokerage structures
Not only this, it suggests developers to try for direct customer deals and pass them the CP incentives.
Most importantly developers have been asked to focus on completing projects as fast as possible to ensure sales.
Developers also have been asked to be transparent with the customer, like informing them the revised deadline.
Also to offer price protection and refundable booking amount along with flexible payment schedule
The research includes a survey with 500 developers and found out that 60 % developers saw their real estate business getting back to normal in about 9-12 months after lockdown while only 30 % saw it becoming normal in 6 months.
The research further found that almost 83% wished to continue in the same business despite the various setbacks their business suffered due to demonetisation, RERA, GST and now Corona virus.
Nayan Shah, President, CREDAI-MCHI said, “Given the right price, almost 50% developers are even willing to acquire new property and start projects as early as in 2021 in residential sector. While design changes considering WFH is bound to take place in future projects, some developers are also keen to try it out in undergoing projects”
According to MCHI, as a strategy developers are trying to consolidate and partner with each other for projects and also looking for suppliers and vendors who can enter into barter agreements with them.