Buyers Preferring Ready Apartments

Buyer and investors want to play it safe these days. What with the downturn hangover still persisting, plus the fact that even reputed builders deliver project at a minimum six to seven months past the promised delivery date, the perception of the current buyer is to invest in ready-tomove-in rather than launched (on paper) projects.

Ask real estate consultants about buyers’ perception in the just-launched projects or projects under construction and they reiterate that ready to move in properties win favor easily than projects under construction. According to a Gurgaon based broker, “Financiers are going for projects under construction whereas end users are only headed for either ready-to-move-in or 80% constructed projects - the latter too only with top builders. Even with them, it’s a given that there will be some delay in the project. In general, even though the values may have escalated, the market sentiment remains skeptical.” The broker adds that the final price at which a deal is closed for ready-to-move-in apartments depends on the urgency to sell by the seller. If there is an immediate need to encash that asset and the seller is quoting Rs. 4,100/sq ft, he may even end up settling for Rs. 4,000/sq ft whereas, if he is in no hurry he may well negotiate at even Rs. 4,600/sq ft.

The other reason for the preference for ready-to-move-in property is attributed to the cost being transparent and spelt out in the beginning. The consumer can visit the property and determine the viability of investment as well as avail tax exemption in a ready flat. However, developers argue that if a project under construction offers an escalation-free price for the apartment, penalty clause for delayed delivery by the developer and construction-linked payment plan then the buyer gets a distinct price advantage as compared to a ready-to-move-in property.

Buyers mostly decide on the basis of what will be the monthly payout in the form of EMI vis-a-vis the monthly rent being paid to the landlord. If the buyer is convinced about the developer’s ability and financial capacity to deliver an under-construction property as per schedule, he will definitely wait for the project to get completed. If the buyer is convinced with the considerable construction progress on a periodic basis, his perception about the developer remains positive.”

There is no doubt that the buyers view projects under construction with skepticism. As pointed out by a professional working with a leading multinational in Gurgaon: “Given that all the major property developers are going bust and are scrambling to get money to finish their projects, is there any foolproof manner to assess their financial ability and, more importantly, commitment to complete the project and within schedule?” He analyses that even though in a ready-to-move-in property, the flip side is, that the property may be priced over a similar property under construction. “Also, it may offer lesser flexibility to make structural changes to suit one’s choice; still, I am inclined towards it primarily because of the current situation where there is increased uncertainty on projects eventually getting finished on time, if at all. At least, one is assured of possession and there is clarity on the total amount one is paying and you can work finances accordingly. ”So, ready-to-move-in property win favour hands down with the actual buyer even though he has to shell out a premium for being sure of the exact unit, the exact cost and the exact location.

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