In the past, under-construction homes were a perennial favourite among Indian homebuyers because they cost less, have a longer shelf life and come with modern amenities, if the property is well-chosen.
Under-construction projects by reputed, reliable developers with impeccable completion records are still very much in demand. However, the fact that countless projects have been stuck across the country has dampened the overall enthusiasm for under-construction homes to an extent. Ready-to-move housing is the new flavour of the season. This is not only because ready-to-move homes offer instant gratification, involve no completion timeline risk and negate the need to pay rent over and above equated monthly instalments (EMIS). Also, because of the amount of ready housing inventory available in most cities, prices for ready-to-move homes have reduced considerably. Ready-to-move homes do not attract goods and services tax (GST), which makes them a lot more attractive.
But under-construction housing can still be a favourable option for astute buyers. Though the price difference between under-construction and ready-to-move homes has reduced, it has not vanished altogether. Also, newer buildings must statutorily comply with various new consumer-favouring legal requirements. For instance, new buildings are required to have sufficient parking for all occupants, integrate rainwater harvesting and solar power harnessing, and developers cannot arbitrarily change the original development plans as many did before. The inherent market value of an under-construction home increase as it nears completion. To ensure that buying into an under-construction project results in satisfaction and not dismay, buyers must take some basic precautions while selecting the project:
Trust only reputed developers who have an unblemished history of completing their projects on time and as per the committed development plans. This is especially important in cities and areas where there is a lot of under-construction supply. Ensure that the project is duly registered under the applicable state’s Real Estate Regulatory Authority (RERA) and has been allotted a RERA registration number. Aim to invest in a project which is already 30-40% complete and shows visible construction progress. This would involve personal site visits over at least a month. Bargain for the best possible price. While many developers are willing to negotiate directly with buyers, the negotiation process can be more complex if the project is by a reputed player with a stronger market presence. Don’t be enticed by payment schemes and offers which are obviously too good to be true. Many of these schemes have hidden clauses. Steer away from developers who offer guaranteed returns of any kind.
Anuj Puri is chairman, Anarock