New Delhi, December 28: Homebuyers and real estate investors have often juggled with one crucial question: whether to go for an under-construction property or a ready-to-move one. While the answer to this question varies from time to time, primarily depending on the market environment, more and more experts are of the view that in 2020, ready-to-move homes are the safer bet.
Here are five reasons why investors should consider ready-to-move homes over under-construction ones in the new year:
When a first-time homebuyer buys an under-construction home, he or she would have to wait a long time for the delivery of the house. During this period, such homebuyers would have to pay not only the EMI of their under-construction homes, but also the rent of the place they would be living in while they wait for the house to be delivered. This will not happen in case of a ready-to-move house because one can simply move in to their new home and would no longer need to pay rent.
Thousands of homebuyers who bought their homes during the last decade had to wait endlessly for their homes to be delivered as many builders defaulted on the promised delivery date. Many such homebuyers are running from pillar to post, protesting outside builders’ offices and even running to courts to get what is rightfully theirs. In case of builders like Amrapali, there seems to be no end to the wait for such homebuyers as the builder has gone bankrupt. One can avoid this kind of ordeal by simply going for a ready home.
According to the latest research by Anarock Property Consultants, the price gap between ready-to-move-in and under-construction homes in the top-seven cities reduced to a mere three to seven per cent in 2019. The price disparity between the two categories is witnessing a year-on-year decline and 2020 may see this difference shrink further. While in 2018, the difference was 5-9 per cent; in 2017, it was around 8-12 per cent across the top cities.
Being one of the costliest lifetime investment decisions for most homebuyers, they are becoming increasingly wary of false promises by builders who show a rosy picture, which is usually far different from what they finally get when the house is delivered. In case of ready-to-move homes, there is no risk of that happening because “what you see is what you get.”
Ready-to-move homes do not attract any GST as opposed to under-construction properties, which attract GST at five per cent of the overall property cost, that too, without the input tax credit benefit.