By Mr. Harshvardhan Tibrewala, Director at Roha Realty
Whether to purchase a ready-to-move-in home or one still under construction adds to the dilemma of purchasing a property in Mumbai. While both options have advantages and disadvantages, the choice will depend on various aspects like what the buyer is looking for, his needs/requirements, and whether one is buying for investment or end-use.
With the pandemic and work-from-home (WFH) becoming prevalent, some aspiring home buyers are favouring ready-to-move-in homes, as people find it much safer under the present circumstances. One of the simplest methods to fulfil the dream of home ownership is to purchase a property in Mumbai that is still under development.
Benefits of Under-Construction Property
More manageable on the pocket
An under-construction property in Mumbai does not hurt a buyer’s pocket much as a ready-to-move-in home. If aspects such as location, area, property type and builder are the same, a ready-to-move property costs more than an under-construction property.
More heightened returns
Due to the long window between the purchasing stage and the delivery schedule, purchasing an under-construction property in Mumbai typically results in a more significant return on investment. You have a strong chance of making a substantial return on your capital investment if you sell the property soon after taking possession.
RERA Compliant
Every property needs to be registered under its state’s RERA if it has an occupancy certificate as of 1 May 2017. Under-construction property in Mumbai, therefore, will necessarily come under the ambit of RERA and, thus, become liable to comply with fair trade practices. Buyers can get information on these properties on the RERA website for their particular state and even request quick resolution of their complaints from the Appellate Tribunal established under RERA.
Benefits of Ready-to-move-in Property
Immediate availability
The lack of a waiting period is one of the main benefits of a ready unit. Paying and completing the necessary paperwork will allow you to move in. Additionally, if you are financing your house purchase, it relieves you of the additional pressure of having to pay both your rent and your EMIs.
You acquire what you witness
Unlike an under-construction unit, in the case of a ready unit, you get the same property as soon as you have paid for it. There is no chance of inconsistencies with the claimed layout, features, and amenities, among other crucial things, because the unit is ready for you to examine before you finalise the purchase.
Unburdened from GST Implications
The recently implemented Goods and Services Tax (GST) levies a five per cent tax on purchasing under-construction properties. But the GST does not apply to ready-to-move-in properties.
Noteworthy Trends In Under Construction Vs Ready-To-Move Properties:
- Buyers with financial potential prefer ready-to-move-in properties in Mumbai to meet the instant cash demands of ready-to-move properties.
- Buyers willing to wait to avoid the sudden financial requirements prefer to go for the under-construction property in Mumbai.
- The price difference between the under-construction and the Ready-to-move-in property differs for different cities. The price difference is 3-4% for Mumbai and Delhi. It is because of the competitive real estate market of the region. Meanwhile, in cities such as Pune and Hyderabad, the price difference is generally 4-5%.
- RERA guidelines for the on-time completion of the project and the reimbursements have provided solid grounds for under-construction property investment.
Recommendation & Suggestion when investing in a ready-to-move-in or an under-construction house
- Establish the total budget for purchasing the property in Mumbai and ensure that your finances are in place.
- The property should have all the required permissions and licences.
- To determine the project’s viability and quality, gathering all relevant information on the other parties involved (such as advisors and banks) is essential.
- Considering your frequent commute needs will help you choose the ideal location.
- Buyers should check online and on social media for the project, developer and locality assessments.
