Ready-to-Move Houses Financially Viable Than Under Construction Property Post COVID-19
The current Coronavirus pandemic has shaken up the Indian realty sector. Although the situation is gradually improving and retail sales have started to clock in, homebuyers are in a different kind of dilemma. Does choosing a ready-to-move property have distinct advantages over an under-construction one? Let us cut to the chase and give you the answer – Yes!
The RBI’s decision to cut repo rates (lending rates) has translated into affordable home loans for buyers. Instinctively, homebuyers are even more cautious now when it comes to investing in real estate. Considering the current scenario, let’s break down the situation to understand why buying a ready-to-move apartment makes more sense than an under-construction house.
Comparison between Under-Construction And Ready-To-Move Houses
- Authority over the Flat/Apartment
In the case of ready-to-move-in properties, you can move into your new house almost instantly. In the case of under-construction properties, you may have to wait for two to five years (or more) for getting the possession rights of the flat.
- Risk Involvement
There is no risk associated such as delays in possession in case of ready-to-move-in properties. Project delays are quite common in the case of under-construction properties along with possible project cancellations and other legal hassles.
- Tax Benefits
When you opt for a ready-to-move-in property, you can challenge tax exemption on the principal amount as well as the EMIs almost instantly. However, in the case of under-construction houses, you can claim benefits only after getting flat possession.
- Down Payment and EMIs
In the case of ready-to-move-in property, you will have to just pay EMIs and no other payments would be involved. However, in the case of under-construction houses, the EMIs usually commence once the construction of the unit has been completed. If there is any delay in construction activities, then the EMI will commence once the home loan gets dispensed.
- Additional Costs
The greatest advantage of considering the ready-to-move-in property is that you need not have to bear any increased costs associated with the property once you have paid the booking amount. You may have to bear increased costs linked to under-construction properties. This is much more pronounced as the costs of raw materials for construction are likely to rise with imports being impacted due to COVID-19. If your approved housing loan falls short of meeting the expenses, then you’ll be forced to take a top-up loan which is an added burden.
Taxes play an important role in property purchases. For a ready-to-move property, a buyer does not have to pay any GST. An under-construction flat attracts a GST of 5%.
- Ease of Selling
You can easily sell a ready-to-move unit once you own the rights whereas this isn’t the case with an under-construction unit.
- Surrounding Infrastructure
In the case of an under-construction house, the surrounding infrastructure may not have been fully developed. For example, you may not find good roads or shopping malls nearby. Builders often promise homebuyers that eventually everything will be developed and you’ll just have to take their word.
Whereas when you opt to purchase a ready-to-move property, you get a really good sense of the infrastructure of the surroundings. Usually, you will find schools, hospitals, malls, roads, and institutions already functioning efficiently. This makes for a better option.
When you see a sample flat for under-construction properties, you will be shown the best possible facilities and best quality products. You will have high expectations in terms of quality. However, not all builders deliver the same flat as promised. They may compromise with the quality in places you wouldn’t even notice.
However, in the case of a ready unit, you can personally visit and conduct a thorough examination of the exact apartment that you’re looking to buy. There is no room for false projections and promises here as what you see is what you get. This makes it worthwhile than trusting a builder to deliver an under-construction unit.
Ready-to-move units provide home buyers a chance of avoiding the risk of purchasing under-construction properties that may likely face delays. Despite being a little expensive than under-construction properties, ready-to-move units offer buyers a hassle-free experience. There is no risk associated with possible changes in the future.
You can assess the construction quality of the project, physical and social infrastructure before making a purchase. It also negates the escalating costs and delays that buyers experience with under-construction properties.