Group buying real estate: Everybody wins, JLL report

The following is the report by Ashwinder Raj Singh, CEO – Residential Services, JLL India

Group buying is an interesting new trend that is garnering attention from everyone who has any stake in the real estate market. In this model, groups of buyers approach developers either directly or through agent representation to negotiate scale-based bargains which would be impossible individual home buyers to achieve. It works – and it in fact has special pertinence in the festive season.

For buyers

Property buyers have been waiting for real estate prices to come down for quite some time now, and the fact that it is now a buyer’s market is ensuring that developers offer better deals, bigger discounts and a host of freebies. Groups of friends, family and colleagues or even of like-minded strangers who are interested in the same project are in a beneficial position when it comes to cumulative bargaining power.

For developers

Group buying is beneficial for developers too, as most of the big players are sitting on huge unsold inventories. Instead of approaching individual potential buyers at huge dedicated marketing costs, it makes eminent sense for them to negotiate with groups of buyers and strike a deal that brings in substantial amounts of much-needed liquidity immediately.

The festival season impact

Seeking to cash in on the upbeat consumer spirit during the festive season, real estate developers are already active with discounts and freebies. While selling real estate in bulk is definitely a route developers will seek to encourage and promote throughout the year, the concept of group discounts dovetails very logically with the incentives-driven festive ethos.

Bulk buying of real estate is being pursued not only by buyer groups but also real estate brokerages, which represent such groups and can often negotiate the best possible deals. In fact, even fund houses looking for investments in real estate have considerable interest in this platform. It is always profitable to invest in an under construction project so as to obtain the most competitive prices and sell off these holdings at a later date for healthy profits. In other words, group buying of real estate is, in today’s market environment, a proposition where everybody wins.