One of the major hurdles that the real estate industry in India is facing right now is finding the methods to liquidate unsold real estate inventory. According to reports by JLL India, the country’s total unsold real estate has piled up to over 4,50,000+ in the first quarter of 2020, with a net absorption rate of –30%.
Ready-to-move inventories in the top 7 metropolitan cities of the country now amounts to over Rs. 3.7 Lakh Crore. Mumbai now holds 1st place in both categories of ‘total unsold inventories’ and ‘total value of unsold inventories.’
So, what can developers do to start liquidating this huge pile of inventory? Here are our insights into how you can increase sales of ready inventory today:
1. Introduce ‘Buy Now, Pay Later’ schemes
Developers can introduce easy payment options that allow homebuyers to move-in with a small down payment and start paying EMIs a year or two later.
Some creative examples we came across:
This scheme is a tripartite agreement between the lender, the developer, and the buyer. The buyer has to pay the initial 15% as down payment and then for the next 24 months, his EMIs will be paused.
The bank will pay the developer the 75% in parts throughout the construction period and the buyer will have to take possession after paying the remaining 10% to the developer. After this point, the buyer shall keep paying EMIs to the bank.
Another popular yet creative subvention scheme is the 25% payment scheme. In this program, the homebuyer pays 25% as down payment and then does not have to pay EMIs till possession. That is taken care of by the developer.
However, after possession, the homebuyer will now have to pay 25% annually for the next three years to the developer. In most cases, developers already include interests in the price of the property.
2. Offer seamless moving in benefits
Due to the various stages of lockdown in our country, new home buyers might have to worry about moving in immediately. However, if developers can add a seamless experience as part of their homebuying package, then this will act as an added incentive for people who are ready to buy homes, but unsure about the current timing.
If developers were to tie-up with relevant brands and make sure that buyers are getting free and seamless moving-in assistance that maintains all government health safety mandates, then the process will become simpler, thus speeding inventory sales.
3. Build trust through customer loyalty
Trust should be the primary point of focus for a real estate developer right now. Consequently, customer loyalty through value added services and deals and discounts is the easiest and best way to go about it. When you become an integral part of the daily lives of your homebuyers, they feel more connected and vouch for your credibility over others when it matters.
Often developers do not focus on creating customer loyalty as much as they should. In the current scenario, where site-visits are limited, homebuyers will be more inclined to buy houses from developers whose customers openly advocate their unsold real estate inventory.
If developers offer their customers select services and deals that add more value to their lifestyle, then these very people will refer their friends and family to buy the brand’s unsold inventory in real estate.
4. Motivate channel partners to liquidate unsold real estate inventory
When it comes to developers trying to liquidate unsold real estate inventory in India, they are still heavily dependent on channel partners. Although, from the real estate agent’s point of view, it would become clear that they are more likely to focus on brands that are easy to sell.
However, if channel partners were motivated through a reward-based tier system that worked on account of their performance, then they are much more likely to focus on selling your brand.
The WinnRE platform by Loyalie is designed specifically as a channel partner loyalty program for developers that uses rewards and recognition to create trust and motivation that would result in better sales for you.
With the use of these methods and schemes, developers can speed up sales of their unsold inventory in real estate at a much faster rate. This will help create liquidity in the industry and can be an effective way to tackle the cash crunch and slowdown that is gripping the real estate market in India.