Bottom Line: Post GST the homebuyers across the country prefer a ready to move property.
Be it Mumbai or Pune in the Western part of India or Hyderabad, Bangalore and Chennai in the South, the homebuyers seem to be convinced with the reality of GST and its implications with various stages of construction. It is hence not surprising that most of the homebuyers across the cities today wish to invest in ready to move apartments to save from the hassles of paying the GST.
Reasons to buy ready to move apartment
Saving from GST with ready to move apartments
Saving the dual burden of EMI and rent
Saving from the execution risk borne out of new compliances
Saving from the unknown future charges
Saving from future builder-buyer conflictÂ
There is a general feeling that a ready to move apartment is the answer to save from the GST and other implications emerging out of RERA compliances.
â€śMy reasons of buying a ready to move apartment is pretty obvious â€“ it is freedom from the GST burden. Nowadays most of the homebuyers avoid buying a pre-launch or newly launched apartment. So, instead of buying a near-completion apartment, it is better to buy a ready to move apartment,â€ť says Kalpana Chitre in Pune.
Urvashi Dua in Mumbai is equally clear that it makes more sense to buy a ready to move apartment. Doesnâ€™t it mean paying a bit of premium over the ready to move apartment, if not GST? She believes the developers will no doubt pass on the input cost burden to the buyers but it still makes more sense to buy a ready apartment.
â€śEven if I pay a premium of say 10-15% for the ready to move apartment, I am still not under the burden of paying both the rent as well as the EMI. In a way, I will end up paying the same but without carrying the simultaneous dual burden,â€ť says Urvashi.
Abhinav Sharma in Bangalore has an altogether different reason to go for a ready to move apartment. He believes now with the GST and RERA implementation the developers themselves admit it is a phase of teething trouble. So, in a way it is safer to buy a ready apartment.
â€śI will pay for what I like with no execution risk involved. A project after OC (Occupation Certificate) is a safer bet now since there are so many new compliances to follow. Even the developers are not sure that despite of the best intentions whether or not they will get the OC and that too on time,â€ť says Abhinav.
Yaduraj Pai in Chennai is convinced that the RERA compliances and the GST will in any case escalate the property prices marginally. According to him, whether one buys it under construction or the ready apartments the cost implications would be more or less the same. But buying a ready apartment has added advantage of knowing the all inclusive price rather than paying for many other charges like parking, club etc that would be unknown at the initial stages of construction.
â€śIn the initial stages of construction even the developers can not gauge some of the costs, like the monthly maintenance charges. It is only when the project reaches the level of completion and amenities are ready that the maintenance charges are calculated. I wish to buy a house with all the knowledge beforehand and hence ready to move suits me,â€ť says Pai.
Girigaja Reddy in Hyderabad is also clear that there are distinct advantages with the ready to move property. He feels a common end user buys a house where one would like to live with the peace of mind. Any mismatch in promises could lead to a builder-buyer conflict for endless time and hence he would prefer a ready to move apartment.
â€śThere could be slight deviation with the project, compared to what was promised at the time of launch, despite of the best of intentions of the builder. Now if those deviations were something that is one of the reasons to opt for that project, I would end up fighting with the builder. So, there is no point in going for that. A ready apartment is there to buy what you see and select,â€ť says Reddy.
In a nutshell, the buyers in all the major cities might be having different reasons to make their property choices but the wish is the common â€“ ready to move. The developers are hence today evaluating the build & sell model. This will save them from some of the harsh provisions of the RERA compliances. Also, they will know the exact tax liability and interest liability in quoting the final price of the ready apartment.
Is build & sell model the next big idea for the Indian real estate that could bring the fence sitter buyers back to the market? Well, only the time will tell but going by the homebuyersâ€™ wish list it appears to be closer to the reality.
By: Ravi Sinha