A growing number of developers in the Mumbai real estate market are reintroducing ‘buy now, pay later’ schemes, which allow buyers to pay only 10 per cent or 20 per cent of the price upfront, and the rest on possession. These schemes, prevalent during the real estate slowdown between 2015 and 2019, aim to boost buyer sentiment.
One of the recent buyers is Anish Chaturvedi, an IT professional at Bandra Kurla Complex, who lives on rent in Borivali. Chaturvedi was seeking to buy an apartment in Thane. These schemes, which are aimed at boosting buyer sentiment were prevalent during the real estate slowdown between 2015 and 2019.
With a growing number of real estate developers in Mumbai real estate market such as Raymond Realtors, Keystone RealtorsMacrotech Developers (Lodha), Keystone Realtors (Rustomjee Group), Raymond Realtors, Wadhwa, Runwal, and Ambit having introduced flexi-payment offers in the last six months, home buyers like Chaturvedi are seriously exploring these options.
For instance, for its Thane project, Lodha is offering an option of 25 per cent upfront payment and 75 per cent on receiving the occupation certificate (OC). Similarly, in Thane, the Raymond group provides an option of paying 20 per cent upfront, and nothing until January 2025. In November 2023, during Diwali, the Rustomjee group offered flexi-payment options for some of its projects.
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Experts say primary sales in the Mumbai real estate market have softened in recent months and an increase in launches over the past two years has led to an oversupply of inventory, prompting developers to push sales via such schemes. “Reintroduction of the 20:80 subvention scheme is a strategic move to attract homebuyers and expedite inventory offtake, thereby improving cash flow and reducing carrying costs”, they point out.
Listed players do this because they have to show their pre-sales number every quarter to investors. For cash flows, developers either rely on banks or sell at a lower price by giving innovative offers. Commitments received from homebuyers (who make the initial payment) also act as collateral for developers, and help raise loans from the banks," said Ravi Kewalramani, Director at RK Mumbai Realtors.
According to the Maharashtra Real Estate Regulatory Authority (MahaRERA), the number of units launched in Mumbai city limits increased from 25,404 in 2020, to 52,771 in 2023.
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