While purchasing a property, a common question with many buyers is whether to buy an under-construction property or a ready-for-possession property. Although the answer to the question depends on various factors such as purpose of buying, industry experts feel that it is always advantageous to book an under-construction property.
A recent poll by ConstructionBiz360 echoes the expert opinion as 100% respondents have voted in favour of property under construction.
According to Santosh Kumar, CEO (Operations) at Jones Lang LaSalle India, “The primary advantage would be that an under-construction property will invariably come cheaper than a ready-for-possession property. Depending on the stage of construction and also the response that the project has already elicited from other buyers/investors, the rates can be from anywhere between 15-30% lower.”
Citing the biggest advantage of an under-construction property, Gulam Zia, national director (Research & Advisory Services) at Knight Frank India said that in such property the cash outflow is well spread out and can be linked to the construction’s progress.
Investors also prefer an under-construction property due to lucrative price rates, discount offers and high returns, opine experts and analysts. Besides, investing in an under-construction property also allows an investor to sell it, after paying a few instalments. The investor need not wait till the possession of the property for selling the same.
Pointing out the other benefits, Pravin Bavadiya, president of Ahmedabad Realtors Association said, “Booking an under-construction property helps the buyer to select the location, direction and floor of the building. Besides, he can get the flat customised.”
Risks and things to note
Despite such advantages, the primary risk involved with an under-construction property is delivery delays or even defaults, leading to serious financial repercussions sometimes. Unlike a ready-to-use flat, under-construction properties cannot be immediately used for occupancy or given on rent.
Prospective buyers should necessarily check the following aspects before investing in an under-construction property:
It is therefore advisable to invest in an under-construction property developed by a credible and reputed builder.