Homebuyers are increasingly going for ready-to-move-in apartments than under-construction homes as instances of delays and defaults by the builders seem to have become the norm.
Ready apartments offer the here and now certainty than the future uncertainty associated with uder-construction properties, although they are costlier. The trend indicates that consumers are more interested in certainty related to such ready apartments than saving money by booking an under-construction apartment that offers deferred payment facility.
Buyers are ready to pay more for ready-to-move-in apartments because investing in under-construction projects is a risk considering the uncertianty. Builders too are focusing on project completion rather than launches.
With not muh sales happening the inventory is piling up. Also, recently there has been a substantial jump in inventory in the resale market. This pile-up has made purchasing a possession-ready property a more viable option now. Kishor Pate, CMD, Amit Enterprises Housing, says, “Never in the history of the Indian real estate market have properties ready or almost ready for possession been so cost effective.”
Quality properties from reputed developers, in good locations, are now available for possession at prices previously available to buyers willing to wait for two years or more for possession, Pate adds. Excess inventory has helped check prices. Shveta Jain, MD, Residential Services, Cushman & Wakefield, says, “Jump in cost for properties after completion of construction is no longer visible these days owing to the excess build-up of inventory.”
The primary benefit of buying a possession-ready house is that you save on rent. And, if you do not plan on using it as your residence, you can let it out on rent and start earning an income right away. With an under-construction property, there is always the chance of the builder not handing the possession on time.
Delays have serious financial implications for the buyers. Buyers need to pay EMIs on the home loan as well as rent on the current accommodation. They also stand to lose out on a chunk of tax benefits on interest payment towards the housing loan, if they do not get get possession within five years of having availed of the loan.