Gold, holidays and luxury cars offered by cash strapped Indian developers
Indian developers and estate agents are offering cars, holidays, gold and even free apartments in an attempt to sell properties in the current financial downturn.
Although India's property market is worth £20 billion and forecast to grow to £90 billion by 2015 there has been a severe downturn as demand has fallen off due to high interest rates and restricted lending.
According to industry specialists developers are doing all they can to attract buyers but they are reluctant to drop prices, prefering to offer incentives instead.
The response has been great according to Jaypee Greens developers who are giving away luxury cars with every bungalow priced at $600,000 and over.
Cosmos estate agents have set up a buy-one-get-one-free scheme whereby the buyer gets a free one-bedroom apartment with each bungalow sold in Mumbai.
Other incentives include 50 gram gold nuggets worth about $1,200 from SVP Builders in Ghaziabad city, while industry officials say family vacations to Europe or club memberships are also being used to tempt customers.
The latest figures show that property prices have fallen an average of 20% this year. And those who are still buying are on tight budgets.
Some developers are putting construction on hold. The Hindustan Construction Company, one of India's largest builders, has put on hold three planned townships in the hope interest rates will dip again and help bring down mortgage rates.
'We are going to wait and watch how the situation unfolds. Lower interest rates, greater liquidity and confidence-building measures are needed, said Chairman Ajit Gulabchand.
Others are seeing a severe dip in profits. Bluechip group Parsvnath developers posted a 17% rise in revenues in the year ending March 2008 compared with 135% growth the previous year.
Leading developer Unitech has seen sales growth slip to 26% in the last fiscal year compared with 253% the previous year.
Not all are convinced that 'cheap gimmicks' will help to boost the property industry. Parsvnath said it believes the best solution is to build cheaper apartments that people can afford.
'The present conditions will lead to a slowdown in implementation of projects and instead of selling at losses, developers will delay projects,' said Parsvnath managing director Pradeep Jain.
