Developers say customers prefer ready possession flats, even if it involves shelling out more
Mumbai's real estate market is witnessing a shift, and buyers are no longer prioritising under-construction properties. Developers say most of the sales they are witnessing now are for ready possession flats. The reasons for this, they say, are because buyers don't want to take undue risks, and because they save money on GST when it comes to a property with an occupation certificate.
Niranjan Hiranandani, founder and MD of the Hiranandani Group, said buyers used to prefer under-construction properties because these tend to be cheaper, offer staggered payments with lower EMIs, rate appreciation, etc. But a slew of reforms mean the new age buyers work with different parameters.
Dhaval Ajmera, director, Ajmera Group, analysed the psychology of the new age buyers, saying, "It especially benefits people living in rented accommodation. They can save money they spend on rent and use it to pay bank EMIs."
Hiranandani said 12 per cent GST that is levied on new flats is another major factor dissuading buyers. "Across last year, we witnessed a trend whereby home buyers made payments to real estate developers, either at the project's launch stage or at the time of receiving an occupation certificate. The new regulatory regime enhances buyer protection, so there is actually very little risk under construction houses face as compared to ready possession ones," he said.
What's more, builders with ready flats are more willing to negotiate. Manju Yagnik, vice-chairperson of the Nahar Group, said opting for an under-construction property would mean buyers end up paying interest on the home loan in addition to rent. But since the cost for developers to retain ready-to-move inventory is also high, they prefer to offload their inventory, offering good deals and giving buyers the best prices, Yagnik pointed out.
REAL ESTATE LEARNS HOME TRUTHS
Builders slashing prices and offering deals to offload their unsold inventory of properties
2.70 lakh – Unsold inventory in Mumbai
40K-45K – Units available for eady possession
2 lakh – Under construction units in different phases of construction
1.20 lakh – Units available in the resale market
12% – GST on buying an under construction house
15% – Total supply of ready possession flats
There was no communication from the developer until I approached MahaRERA. Even today, I don’t know when I will get possession.
Ravi Nair, Waiting for possession since 2010
I will never be able to trust an under-construction property. After what has been happening, I will only look for places which are ready for possession.
Nirban Dasgupta, Waiting for construction of house
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