We would like to start by saying that we understand why a ready-to-move-in house will remain a favorite, especially amongst the first-time home buyers. Having said that, we’d like to offer you a different perspective on the under-construction properties being offered by various developers today and how there are more options in the market than what meets a new investor’s eye.
Just like any other industry, real estate has gone through its own buying trends. If you looked at the market perhaps 2-3 decades ago, investors were heavily inclined towards buying under-construction properties. Then came a phase wherein some of the projects got stalled or did not get delivered, which had the under-construction market gain notoriety as being a risky investment. Although, with the introduction of RERA, this concern mostly stands alleviated. All an investor needs to do is to look for a developer who has his project registered under RERA, which implies that the developer will stick to the completion timelines he has provided. If not, they become liable to pay compensation to investors.
Also, as per a report by PropTiger, 74% of the houses sold in Q2FY20 in DNCR were under construction houses. The number for Mumbai and its surrounding areas was 83%. This implies that very contrary to the buying trends we perceive, the viability-conscious and market-savvy customers are still investing in under-construction houses. And here’s why-
Lower Cost- Your investment in an under-construction project will be relatively much lower; almost 10-30% lower (depending on the market). Hence, your home loan is lower, and so is the interest that you pay on it.
Higher Appreciation- An under-construction property is yet to see a cycle of appreciation since it is still being developed; thus, the value of your property stands a chance of increasing significantly. Also, because you buy at a lower cost, the appreciation is even higher for you. Hence, it makes for a good choice even if you are buying it only as an investment Our project, Emaar Palm Heights, provides the investors with a serene life amongst the Aravallis and in an area that is ready to appreciate manifold.
Emotional Value- Have we all not dwelled on the feeling of being the first-ever residents of a home? The feeling is unsurpassed. Also, in an under-construction project, your say in selecting the flat you want and to have it customized, are very high.
More compliant- The under-construction houses are highly likely to be better equipped with facilities, amenities, construction techniques and even better techniques such that rainwater harvesting, solar-powered systems, better sewerage etc. This is because they are in-line with the latest trends and technologies. For example, our under-construction project Emaar DigiHomes, offer one-of-its-kind voice-enabled homes equipped with the best that technology today has to offer.
For long, the GST applicable on these projects was considered a roadblock in buying of these houses. But now with the GST having been dropped to 1%, the odds are more in favour of the under-construction projects.