Homebuyers in Delhi-NCR are preferring ready to move flats in the wake of recent developments in which thousands of investors were not handed over their units by the builders.
While more than 32000 investors are facing uncertainty following Jaypee Infratech becoming bankrupt, the process for corporate insolvency resolution under the insolvency and bankruptcy code is likely to be initiated against Amrapali group companies.
Though figures are not available as to how many ready to move flats were sold, realty experts unequivocally say that most of the property enquiries are now related to ready to move projects. According to property firm Jones Lang Lasalle (JLL), in the first half of 2017, out of the total investment of Rs 16,008 crore, the top seven real estate markets in the country received an investment of more than Rs 13,500 crore. Among these, Delhi-NCR received the highest investment of over Rs 5,800 crore, followed by Mumbai (Rs 3100 crore), Bengaluru (Rs 2100 crore) and Chennai (Rs 1,700 crore).
Samantak Das, chief economist and national director (research) of Knight Frank, a leading property consultancy firm, said that people’s preference has changed in view of the recent developments. “Commitments made by builders are not kept. In many cases, the timeline is not followed. Moreover, the final product is not as per specifications, which were offered at the time of booking the residential units. There is total lack of confidence among the buyers for incomplete projects,” he said.
According to Ashwinder Raj Singh, CEO of Anarock Property Consultants, though ready-possession projects are costlier than under-construction projects, buyers are now more willing to purchase properties on an immediate basis rather than wait for the construction to be completed.
“Moreover, the new RERA (Real Estate (Regulation and Development) Act strictly prohibits builders from advertising their under-construction projects while allowing the freedom to attract buyers for projects which have Occupation Certificates (OC ready). With the new rules, buyers are naturally showing increasing interest in such properties, which are essentially ready to move in,” he said.
Another factor which has led to this trend is the fact that more and more people feel that paying a little extra to acquire a house right away is a better option rather than paying rentals and EMIs together for a long period.
In any case, under construction projects are infamous for delays in completion which leads to buyers paying double the cost – paying EMIs as well has high rentals while awaiting possession of their property.
According to Vikrant Thakur, a property consultant, fly-by-night developers will be out of picture in the wake of RERA coming into reality. Strict RERA guidelines will ensure that only serious and genuine players operate in the market. However, for the time being buyers feel that only completed projects would be better in terms of security.
In many cases, according to property experts, projects are coming up on the peripheries of major cities which lack supporting infrastructure like roads, electricity, water connections etc. Thus under-construction projects have to wait much longer for deployment of basic this infrastructure. This discourages buyers, who want to move into their new homes and also start living life with decent facilities instead of waiting indefinitely.
According to Singh, the implementation of GST has resulted in reduced tax burden on buyers purchasing ready-to-move-in apartments. “The tax on the entire cost of the project, including the land, will be levied at 12%. This should be enough for the builder to claim input credit, thus making OC-ready projects more economical for buyers,” he added.