Nowadays, the booming residential real estate industry is experiencing drastic changes with the implementation of the Real Estate (Regulation and Development) Act (RERA). This act excludes builders from promoting their under-construction projects and allowing them to attract buyers for OC (Occupancy Certificates) ready projects. With the enactment of new rules, buyers are showcasing their interest in such properties that are Ready-to-move in. Undoubtedly, the ready-possession projects are much costlier than projects that are under construction. Nevertheless, buyers are favoring more ready-to-purchase properties, instead of under-construction projects. In today’s market, there are fine reasons for buyers to go for OC-ready projects or Ready-to-move-in properties.
Here’s a list of reasons why people are willing to take possession of Ready-to-move-in properties instead of Under-construction projects.
- Price differentiation between Under-construction & Ready-to-move in Properties- In last couple of years, the real estate industry has gone through worst stages, such as price reductions, higher unsold inventories and lower new launches. These paradigms led developers to offer discounts, freebies and deals, in order to attract buyers. Though the market is gradually uprising, these factors are still active.
Thus, it enforced buyers to go for Ready-to-move in properties, rather than wait for upcoming projects. While prices are starting to rise once more on the back of slow market recovery, this trend is still in its beginning. This led investors and buyers to emphasize completely on Ready-to-move in properties or OC-ready projects. - Rental Cost- A significant number of projects will be patronized by buyers who use bank loans. Buyers not only have to pay EMIs but also the rent of their existing homes, while waiting for the project completion. To acquire a house straight away, paying a bit more is quite cheaper than paying rentals over a long period.
- Delivery Date- In India, under-construction projects are infamous for delays that ultimately lead to higher costs usually in the form of EMIs. Though delays may because of diverse factors, the financial situation of buyers prohibited them to wait beyond a period of time. Therefore, the choice to invest in OC-ready projects or Ready-to-move in properties makes a much better sense.
- Earning Through Rentals- Most investors usually purchase homes with an aim of earning rental income. Buying property in a completed project will surely help them to start earning through rentals, instead of waiting for years.
- Reducing Suspicious Developers- The real estate industry of India is quite uneven and there have been a lot of fake developers who fooled buyers to a great extent. However, with the execution of RERA act, such fake developers will reduce. The strict terms and conditions ensure that only genuine developers will operate in the market. Nevertheless, buyers still feel in danger and hence favor the properties that are Ready-to-move in.
- Modernized Infrastructure – New projects are coming up on the edge of metropolitan cities where basic infrastructure such as water connection, electricity and roads are not fully urbanized. Buyers are promised of supporting infrastructure only when the under-construction projects are completed. This ultimately led buyers to invest in OC-ready projects as they are already being infused with top-notch facilities.
- Result of GST – No doubt, the enactment of GST (Goods and Services Tax) act has reduced tax burden on buyers and led them to prefer OC-ready or Ready-to-move-in projects. The tax on the absolute project cost (including land) will be imposed at 12 percent. As a result, it is enough for the builder to ask for input credit, making Ready-to-move in properties more affordable.
Conclusion
Selling OC-ready projects work well for developers as it also helps them to get required liquidity and free from their unsold inventory. Furthermore, taking possession of Ready-to-move in properties will allow buyers to enjoy the best of modern infrastructure and lavish facilities they have always dreamed.