Developers across the country are adopting ‘Sachet Marketing Strategy’ by building smaller apartments to attract customers in the face of sluggish sales, crippling liquidity crunch and rising cost of capital.
Demand for home has declined in the past one year due to rise in property prices and sluggish India’s GDP growth future prospect are also downbeat. Experts believe although sales have dipped, the intrinsic demand is still intact. Prospective buyers may be sitting on the fence, waiting for a trigger and this can come from the trend of smaller and cheaper homes.
“This is an exciting concept emerging in the real estate sector, both size and price fit the budget of any middle class family. For developers, this is a good move to pep up home sales,” Omaxe, CEO Mohit Goel told The Pioneer.
“As a practice builders react according to the demand and mood of the market. The intrinsic demand for homes is intact as usual. Sachet marketing strategy helps attract a new group of first-time buyers as for these people the initial investment for a house and subsequent EMI plays a very important role in making up their mind,” said Supertech, CMD RK Arora.
Similarly Best Property Deals, MD Raj Sharma opined that Sachet marketing was introduced in India in 2009, where builders could offer affordable house. The demand was tremendous. Due to slow sales and higher interest rates and unfavour Government policies, the customers are getting into wait and watch mode to reach out to their investor and property buyer.
But on other hand Neeraj Bansal of KPMG pointed out that “To increase affordability for the buyer, builders have launched projects with relatively lower apartment sizes resulting in lower cost of acquisition by the customer and lower monthly cash outflow with reduced EMI’s. However, buyers should carefully review the apartment layout and size to ensure that it meets their requirements, as though with reduced size they may be able to acquire a 2BHK or 3BHK apartment at a reduced overall cost, but the size of the rooms will be relatively smaller as well.”
“Basically this is not reduction in price per sq feet by the builder, it is only the size reduction so the buyer may get a 3 BHK but actually the size may be much lower than the normal one,” Bansal added.
Recent launches seen in NCR have smaller size homes on offer, a size unheard of in the NCR, especially from big builders. Homes in the NCR are usually large compared with Mumbai. Amrapali has recently launched 550 sq ft apartments in the NCR.
Supertech launched its latest project Golf Village with apartments starting from 1,000 sq ft as the company is finding it difficult to sell larger apartments. last year, the developer had launched a project, Upcountry, in a similar location but with apartment sizes starting from 1,500 sq ft on the Yamuna Expressway near Delhi.
Many developers and builders now feel that it is easy to sell smaller-sized apartments as ticket size comes down dramatically and there is almost unlimited demand in the affordable and mid-segment.