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Mumbai ready for ready to move apartments

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News Point: A Track2Realty survey in Mumbai finds that more than seven out of ten, 72%, of the homebuyers wish to buy ready to move apartment now.

Mumbai City, Mumbai property market, Indian real estate news, Indian property market, NRI investment in Mumbai, Track2RealtyIt seems post the GST and RERA the focus of the buyers have shifted to ready apartment with no execution risks and the GST liability. The buyers even maintain that they won’t mind paying a premium for the ready to occupy apartment.

Ready to move apartments are even bringing the fence sitting buyers back to the market now. With many ready to move and near completion projects available in the Mumbai market, the prospective homebuyers are now coming forward for the standing inventory with more confidence.

“With a ready apartment paying the premium is a myth. It is basically the interest paid by the developer that is shifted to the buyer, which is reasonable. If I get the house immediately after having made the payment and I am not under the double burden of the rent as well as the EMI, I won’t mind paying a premium for that. This is anyway saving me from the execution uncertainties and endless delays,” explains Rajat Pathak, a homebuyer in Ghatkopar.

It is interesting that the RERA which should have ideally served as a comforting factor for the buyers of under construction projects is viewed very cautiously in the Mumbai market. Nearly half of the respondents, 48% say RERA alignment with the  market will take sometime and as of now it is better to buy a ready apartment.

The verdict in Mumbai is loud and clear: majority prefer ready to move property even though degree of choice might vary in various locations. As a matter of fact, within the Mumbai Metropolitan Region (MMR), the established locations and the locations that are business destinations are more sought after for ready to move properties. On the other hand, periphery locations have less preference, compared to established locations, for ready to move properties.

The survey finds that in the business driven markets like Bandra, BKC, Juhu, Goregaon or Andheri a vast majority, 78 per cent to be precise, wants a ready to move property. On the other hand periphery locations like Dahisar, Mira Road, Vasai, Virar, Kalyan or Dombivali the preference for ready property is relatively lesser. But a majority of buyers, 56 per cent nevertheless prefer ready to move property only on the periphery locations also. In between there are locations like Cuffe Parade or Bombay Central where the demand for ready to move property is as high as 64 per cent.

Why Mumbai prefers Ready to Move

Buy what one sees: When a buyer invests in a ready-to-move property, he/she buys all the amenities or facilities that are present on the property, including furniture, electrical switchboards, fans, air conditioners and other appliances. Given this scenario, there are no chances of being cheated with regards to the amenities involved. 

Enjoy immediate possession: Be relieved from rent; in case the buyer was previously residing in a rented home. 

Avoid paying GST: There is no GST liability on the ready to move property.

What discourages ready-to-move

The arrangement of money in a short span of time: The total cost must be paid at one go, for down payment, registration, etc. 

Price premium: Higher cost price as compared to an under-construction flat, since it includes cost of risk premium and developers’ interest cost. 

No customization option: Little or no option for internal changes/custom design in configuration. 

Industry speaks

Manju Yagnik, Vice- Chairperson of Nahar Group admits that in Mumbai ready to Move flats will be more in demand as homebuyers are now gradually opting for ready possession flats. Under construction purchases lead to consumers bearing additional financial burden of paying rent for existing accommodation along with home loan installments. With keeping the current scenario in mind, buyers would want to go with the safer option, which is ready to move flats.

“With the downturn in the last couple of years and a high unsold inventory, it is a good option for buyers to invest in a ready to move flat, rather than wait for a new project to come up over a period of time. Ready possession apartment offers homebuyers a chance to side-step the risks of buying under-construction properties that may be prone to inordinate delays,” says Yagnik.

Rahul Shah, CEO, Sumer Group, on the contrary, advocates for the under construction projects that are RERA compliant. He maintains that since developers are required to complete the projects in the time frame declared originally, the buyer’s interests are protected under the RERA Bill.

“Given the scenario, it would be wise to invest in projects that are under construction. This will help the buyer save upon the cost price of the property, “ says Shah. 

The voice vote in the city property market nevertheless is for ready to move apartments. The primary benefit of buying a possession-ready house is that a buyer can save on rent for current accommodation while shelling out EMIs on the home loan. Also, if one does not plan on using it as the residence, one can let it out on rent and start earning an income right away. One of the key factors while purchasing ready to move in apartment is that one gets to see the overall view of the house, the apartment and amenities.

By: Ravi Sinha  

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