With housing sales moderating and unsold inventory piling up in the Mumbai real estate market, developers are increasingly adopting aggressive pricing strategies to lure fence-sitters.
After experimenting with schemes such as ‘Buy Now, Pay Later’ and subvention plans, some developers are now scrapping the traditional floor-rise premium altogether and offering uniform pricing across all floors.
The fierce competition in Mumbai’s property market over the past three years has brought back the trend of ‘No Floor Rise,’ particularly in high-rise projects where supply is abundant.
Even Grade A developers, facing intense pressure, have begun eliminating floor-rise charges to stay competitive. As a result, Grade B developers, who previously leveraged floor-rise pricing to boost revenues, are now reversing course, adjusting their marketing strategies in response to the oversupply and expanded choices available to buyers.
What is floor rise?
Several real estate developers in Mumbai typically charge an additional ₹100 to ₹500 per sq ft for higher floors, citing advantages such as better views and greater exclusivity.
Developers say floor-rise premiums help offset the increased construction costs associated with building higher floors and are likely to remain a standard pricing component.
What is the ‘Buy Now, Pay Later’ scheme?
Several Mumbai Metropolitan Region (MMR) developers, including Rustomjee Group, Hiranandani Group, Raymond Realty, Arkade Developers, and Kalpataru, had earlier offered potential homebuyers flexible payment plans, also known as ‘Buy Now, Pay Later.’
A flexible payment plan allowed potential homebuyers to pay in instalments. Homebuyers paid only 10% or 20% initially, and the rest on possession.
This payment plan gained popularity between 2015 and 2019 and was aimed at boosting homebuyer sentiment. However, a few developers in the Mumbai real estate market even permitted homebuyers to move into the apartment after depositing 20% of the cost. The remaining 80% had to be paid in equal instalments over the year from the date of getting possession.