While ready-to-move homes provide instant gratification, the value of under-construction is a function of the time-honoured adage ‘all good things come to those who wait’.
Nov 07, 2019, 08.11 AM IST
Anuj PuriChairman, Anarock Property Consultants
Historically, under-construction housing was a hot favourite with Indians – not only on account of their lower cost but also because new properties last longer and new projects tend to have the latest amenities and facilities. Also, such properties can appreciate even while they’re being constructed and reach high values when they’re completed.
Because of the fear syndrome that stuck and heavily delayed projects have induced among buyers, and also because they don’t attract GST, ready-to-move homes are currently the most preferred option. However, all the advantages that under-construction projects hold for savvy end-users and investors still apply – the only proviso now is that one should only trust ongoing projects by reputed developers whose sites show actual construction progress.
While ready-to-move homes provide instant gratification, the value of under-construction is a function of the time-honoured adage ‘all good things come to those who wait’. The risks of non-completion or delay are mitigated by selecting good developers with proven completion track records and sound funding, and the cost arbitrage that under-construction homes provide over ready-to-move ones is still a pretty compelling rationale.
There are also other good reasons to opt for under-construction homes. Newer housing projects will comply with the latest legal norms laid down by the government – they are more likely to have proper rainwater harvesting and water treatment systems, modern sewerage and the requisite number of parking spaces for all occupants.
To ensure that buying into an under-construction housing projects results in satisfaction and not dismay, buyers must take some basic precautions while selecting the project:
• Trust only reputed developers who have an impeccable track record for time-bound project completion and adherence to the final project plans. This is especially important in cities and areas where there is a lot of under-construction supply on the market
• Look for properties which are being marketed by reputable, RERA-registered property consultancies which will not charge brokerage from the customer and additionally assist with the paperwork and ensure that there are no legal impediments to the project.
• Do not consider projects which do not have a RERA registration number, and look for at least 40-50% completion of the project as well as ongoing construction activity. Regular visits to the site, either in person or via a property consultant, are a must.
• Negotiate the asking price or do so via a property consultant. There is ample scope for bargaining in the current under-construction marketplace. However, the bargaining process needs a strong stomach and some experience – it is often advisable to get it done through one’s real estate consultant.
• Do not be enticed by freebies and illogical assurances. Freebies should not sway a purchase decision – only the inherent value of the property must be considered. By the same coin, one must not fall for ploys like ‘guaranteed returns’ as there is no way ROI can be guaranteed.
GST rates for under-construction affordable housing have now come down and RERA has rendered investment in under-construction housing much safer than before. For this reason, NRI investors interested in buying homes in India are also coming back to the market with renewed confidence in under-construction homes.
If these precautions are taken and the property has been properly selected in line with suitable location and developer’s reliability and brand standing, the process of buying an under-construction home does not have to be fraught with risk and worry and can be very rewarding.
DISCLAIMER: The views expressed are solely of the author and Group Karamchand does not necessarily subscribe to it. ETRealty.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.