Subvention Schemes – A Win-Win For All

By Mr.Kaizad Hateria, Brand Custodian & Chief Customer Delight Officer, Rustomjee Group

Practically every new project being launched by real estate majors usually advertises a subvention scheme. Welcome to the new age way of buying a home – through subvention. For the uninitiated, subvention literally means ‘provision of assistance or financial support’– in this case, it is the developer who would be providing the financial support to the buyer through the subvention scheme. No matter what the payment ratio on offer is – the buyer needs to pay the minimum amount for booking a home and the balance only on possession -no financial burden on the buyer till they are ready to move into their home.

Generating Demand

The subvention scheme is just another way that developers have thought of to ensure a demand for homes in a relatively sluggish market. While freebies like gold coins, waiver of stamp duty, free parking etc. may appeal to a buyer’s avarice; the subvention scheme has a bigger draw because it appeals to a buyer’s wallet – in essence, his disposable income remains unaffected in the time that it takes for the developer to deliver the project. In order to attract buyers, developers tend to play around with the ratio of the subvention scheme, so there could be 20:80, 30:70, 10:90, 5:95 or even 1:99. The buyer can shop around and decide the minimum he is willing to pay to book a home.

What’s in it for the developer?

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