‘Buy Now, Pay Later’ Schemes Resurface in Mumbai Real Estate Market

In a strategic move to bolster buyer sentiment, a growing number of developers in the Mumbai real estate market are revisiting the ‘buy now, pay later’ schemes. These schemes, allowing buyers to make a minimal upfront payment of 10% or 20% and the rest upon possession, were prevalent during the real estate slowdown between 2015 and 2019.

Anish Chaturvedi, an IT professional residing in Borivali, recently took advantage of one such scheme while purchasing an apartment in Thane. These flexible payment plans have gained traction as developers aim to navigate the evolving market dynamics and stimulate the real estate sector.

Several prominent developers, including Raymond Realtors, Keystone Realtors (Rustomjee Group), Macrotech Developers (Lodha), Wadhwa, Runwal, and Ambit, have introduced flexible payment options over the last six months. For instance, Lodha’s Thane project offers a 25% upfront payment option with the remaining 75% due upon receiving the occupation certificate (OC). Similarly, the Raymond group in Thane provides a 20% upfront payment option with no payments due until January 2025.

The Rustomjee group also embraced flexible payment choices during Diwali 2023 for some of its projects. Industry experts suggest that the softening of primary sales in the Mumbai real estate market, coupled with an oversupply of inventory due to increased launches in the past two years, has prompted developers to adopt these schemes to expedite inventory offtake.

The 20:80 subvention scheme’s reintroduction is seen as a strategic move to attract homebuyers, enhance cash flow, and reduce carrying costs. Developers, particularly listed players, leverage such schemes to showcase pre-sales numbers to investors every quarter. Additionally, commitments from homebuyers, who make initial payments under these schemes, act as collateral and facilitate raising loans from banks.

According to the Maharashtra Real Estate Regulatory Authority (MahaRERA), the number of units launched in Mumbai city limits surged from 25,404 in 2020 to 52,771 in 2023. As the real estate market continues to evolve, these flexible payment plans are anticipated to play a crucial role in maintaining buyer interest and supporting developers in achieving their sales targets.

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