Possession first, pay later, new realty market mantra

In a desperate bid to liquidate their surging inventory, the property builders are offering customers a “buy now, pay later" scheme for ready-to-move-in homes. The easy payment schemes, which were earlier offered only for under-construction projects, have now found their way into ready-to-move projects to clear unsold inventory as the sector continues to be buffeted by poor demand and cash crunch. Buyers can move in with a small down payment and pay EMIs after a year or two; most of the projects in which such schemes are being offered are high-end homes in India’s top cities. While these schemes are being selectively offered by some developers in Bengaluru and the NCR, they are more common in Mumbai, where homes are the least affordable and unsold inventory has seen the steepest rise this year. Incidentally, in recent times, buyers have favored ready projects, which have no execution or delay risks. Yet, selling luxury homes has been a challenge for builders, as interest costs pile up on unsold inventory. Realty firms are also marketing these offers to buyers, saying occupancy certificate has been obtained and no goods and services tax is applicable. Mumbai-based Sheth Creators has multiple schemes running across a couple of its ready projects. At Vasant Oasis in suburban Marol, where apartments cost Rs.2.3 crore and above, buyers can pay 10% now, move in and the builder will take care of equated monthly installment (EMI) for a year. The EMI payment for buyers starts only after that. In the Beaupride project in upscale Bandra, buyers can pay 25% now and 25% annually for the next few years.