The real estate market has experienced an upswing in 2016 but it still struggles to attain stability amidst the prevailing economic scenario. The upswing has resulted in a rise of developmental projects aided by the newly passed real estate bill that offers a glimmer of hope to the buyers and sellers. However, people still prefer to buy ready-to-move in apartments as compared to the ones under construction. The risk is considered to be relatively lower as they do not have to face issues such as differences from the given layout plans or quality, delays in construction and price escalations.
It also happens that even though ready-to-occupy apartments are less risky, they are priced about 25-40% higher than the under construction properties that sometimes makes them unaffordable. In this situation, buyers tend to opt for projects that are nearing possession. Such an investment can be advantageous for the buyers. They include:
One of the biggest advantages of buying a near completion flat is that there are very little chances of variation from the original plan. The project will have almost completed its civil work. Also, the risk of delay is quite limited as there are comparatively less regulatory approvals remaining. Construction activity is quite unpredictable. This is because the construction schedule is affected due to various issues such as shortage of labourers, delays caused by governmental procedures or availability of raw materials. But, once a building is nearing completion, usually, it is only the occupation certificate that requires approval from the government. Thus, it is perceived as a better and less risky option as compared to an under-construction flat.
Urgent Need for Property
If we look from a financial point of view, even though the under-construction flats are affordable the buyer has to wait until the completion of construction to take possession. Thus, those living in a rented property stand to gain more if they invest on a ready-to-move apartment. Also, if the purchase is made for renting purposes, the buyer can be assisted in payment of the EMIs through the rental income. Waiting for under construction projects to be completed while paying for rent can be frustrating and the buyer will have to pay the EMIs as well as the rent just in case the property possession is delayed.
Ready-to-move in flats offer a chance to avail Tax breaks which otherwise would be delayed in case of under construction properties. If you are planning to avail tax savings then a ready-to-move in property is a better option. Going by Section 80C of the Income Tax Act, the principal repayment of Rs 1.5 lakh paid is subtracted from income for the loan taken for ready-to-move in apartments. The interest paid for the loan is also eligible for deduction up to an amount of Rs. 2 lakh. Such benefits can be availed only after taking possession of the property.
Advantage of the Location
Investing in an area that is fully developed is a profitable idea. Also, projects that are nearing completion have higher chances of price appreciation once completed. For example, if you are going through flats for sale near Garia then opting for projects nearing completion will increase the chances of a profitable price appreciation due to the location and the developed project.
Under-construction, as well as those nearing completion and ready for possession properties, have their own set of advantages and disadvantages. What matters is the buyer’s requirements and financial budget while making the correct choice. If the buyer is looking for immediate possession then completed projects is a better option. If they are looking for long term higher returns then under-construction can be a good choice.