The recent insolvency proceedings faced by some of the most renowned real estate companies has triggered a wave among home buyers. The recent modifications in rules and regulations, such as Goods and Services Tax (GST) and Real Estate Regulatory Authority (RERA) has kept the home buyers in the dilemma for a very long time.
In addition to this, there are many other reasons that these days, the home buyers prefer ready-to-move apartments over under-construction units. Let’s take a look.
There could be hundreds of other reasons which refrain home buyers from buying an under-construction property but one reason that owes the most of it is delayed possession.
There are thousands of cases in India, where projects have been delayed for years. This is why ready-to-move apartments are always a preferable choice for home buyers than under construction ones.
Financial Burden Due to High Rentals
It is almost impossible for the home buyers to buy or invest in a property without taking the home loan. The home buyers have to not just pay the EMIs for the loan but also have to pay the monthly rental for the current accommodation, which adds to the expenses.
So, paying a bit of extra amount for a ready-to-move apartment sounds better than paying for unnecessary rentals over a long duration of time.
A ready-to-move apartment is an investment that the home buyers can always count upon. There are many people who park their hard-earned money into real estate to get price appreciation and rentals in return. With an under-construction property, an investor may have to wait for years to get possession before getting rental benefits.
However, this is not a case with ready-to-move units. The home buyers can immediately rent out their apartment as soon as they get the possession of their property.
Reformation in the Rules and Regulations
The fact is not hidden from anyone that the Indian realty is still an unorganised sector. Its history is filled with numerous fly-by-night builders and developers who not just mislead home buyers but also gets disappear with the initial amount overnight.
The recent modifications in the rules and implementation of RERA have blown a new life in the real estate sector. RERA has proved successful in bringing transparency, accountability and generating a trust factor among the home buyers.
Fly-by-night developers have now become days of past and only genuine players are currently operating in the market. Now, a home buyer just needs security and assurance on their investment that only a ready-to-move property can offer. It is because of this fact that the home buyers prefer ready-to-move apartments over under-construction properties.
Tax Burden Because of GST
The home buyers, these days, are well aware of things happening in the market. They know that doing a bit of homework can definitely get them good results in their house-hunting examination.
Currently, the under-construction properties attract 12% GST whereas ready-to-move apartments are still kept outside of this new tax regime. This is another reason that the home buyers prefer ready-to-move apartments over under-construction properties.
Though the GST rate on houses under Pradhan Mantri Awas Yojana (PMAY) has come down to 8% but it is only a case with affordable housing. The industry bodies are still urging with the central government to bring the GST rate to half on most of the properties to boost the stagnant realty sector.