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Buy house, pay EMIs after taking possession
Published on Wed, May 28, 2008 at 22:22 in 
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EMI HOLIDAY: Builders say such schemes have helped push their sales up by five to 20 per cent.
Mumbai: If you have been wanting to buy a house in Delhi or the National Capital Region but do not have the money to back your aspirations there is no reason to be dismayed anymore.
Now you can walk up to your builder without a penny in your pocket, book a flat, and not pay any equated monthly installment on the home loan till such a time that you get the possession of your home.
With sales dropping continuously and prices showing little signs of cooling down, many tier II and tier III builders like Parsvnath, Gaursons India, BPTP and KDP Infrastructure are offering such EMI schemes to attract potential home buyers.
“If you look at the market and divide it into three categories – 40 lakhs and below, 40–50 lakhs-1crore, and 1 crore and above – the middle category is the hardest hit category when it comes to 2008-09,” said VP – Marketing, Amit Raj Jain, of BPTP Developers. “We're concentrating on that 40 lakh band.
“Currently, maybe they're living on rent or even if it is for investment, so we give them a two year pre-EMI interest holiday after a tie-up with a bank and just by paying 10 per cent or 15 per cent booking amount, they do not pay any pre-EMI interest for the first two years. And after two years, when the property is almost ready or is ready, then they start paying off their EMI straight away,” he explained.
In fact, a report by CITI Group reveals that these schemes act as substitutes to otherwise given discounts on the actual price of the property. This also helps builders in boosting transaction activity.
Builders say that besides helping them boost transaction activity, such schemes have also pushed their sales up by 5-20 per cent in the region.
“Companies will always be working for augmenting their sales, more and more whether it is a high-profile growth time or a sluggish one. More so, in sluggish time, when there is a constant sale, we would like two things: a) Our customer loyalty should improve, b) The liquidity improves,” said Parsvnath Developers COO, B P Dhaka.
“Now, company is in a position to give some discount on cash-down payment. For us, it is cash-down payment, whether it comes from bank or buyer. We have got the money, our liquidity is good, we give better service, and the buyer’s EMI portion – depending on the scheme – the company will bear it.”
Experts say such incentives are expected to indirectly impact developer realizations by 18-20 per cent, and provide some near-term funds for construction.
However, the scope of such schemes is presently restricted to select projects in northern parts of the country. But if extended to other commercial cities, it could become a critical dynamic in the Indian property market.
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DON'T BUY HOUSES AT SUCH SCHEMES...
These are the schemes which led to USA subprime mess. People have no idea what
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