Property developers in Gurgaon have doubled brokerage commissions to expedite sales of their under-construction and ready-to-move-in inventory, according to a report in Financial Express.
The report quotes the head of a finance company: “Many developers give 7-8 percent commission to real estate agents so that they get buyers quickly, which will help them clear their inventory.”
According to the report, real estate agents across the country typically receive a commission of 2 to 4 percent, with agents in the National Capital Region (NCR) often being at the higher end of this spectrum.
Based on industry estimates, Gurgaon has witnessed the sale of inventory worth at least Rs 5,000 crore in the past few months, mainly comprising apartments priced between Rs 5 and 7 crore.
Moreover, many developers in Gurgaon are waiving “flipping charges” or transfer fees to boost sales. This allows buyers to subsequently sell their apartments without registration charges. Flipping fees are charged when the original assignee sells an apartment before it is completed and transferred to the buyer. The waiver of this fee facilitates a faster sale because it is not passed on to the buyer’s final price, the report said.
Sales in Gurgaon increased by 12 percent
According to Anarock Property Consultants, despite a 57 percent year-on-year drop in launches, sales in Gurgaon increased by 12 percent and unsold inventory fell by 35 percent in the March quarter, reaching a total of nearly 33,000 units.
According to the head of a private equity firm, no real sales are taking place, and those that do take place are “parchi” sales, which involve a change in ownership of a property without a formal sale and without formal registration. “Many developers sell these apartments to insurers at Rs 8,000 per sq ft, who in turn sell the real estate agents at Rs 9,000 or Rs 9,500 per sq ft. It is almost a 20 percent margin for real estate agents,” the report quoted him as saying.
The report further quoted Santhosh Kumar, vice chairman of Anarock Property Consultants, as saying that big developers are not doing this. “Bigger developers don’t use any tricks. But it is interesting to see who is buying so many apartments,” Kumar said.
First print: June 14, 2024 | 10:03 am IST