Labourers working at construction site
Picture credit: Pixabay
The year 2024 witnessed a change in the real estate industry. We saw an influx of new builders entering the markets with innovative and luxurious housing schemes.
Tier 1 cities like Bangalore, Mumbai, Hyderabad, Delhi, Pune, and Chennai expanded to their outskirts and flooded them with newer and much more appealing residential projects.
For locals who faced a cap on their property in the middle of the busy cities, these became the next appreciative investment.
Agreeably, this demand-supply correlation also gave rise to the new property rates. This panned across the luxury projects to affordable housing schemes. While the former schemes thrived due to affluent buyers, the latter one saw a decline in new launches in some T1 cities during the second half of 2024. Buyers were worried about the rising prices, suspicious of the timeline provided and scared of failing to pay the hefty loans. But we think there is more benefit and potential in the under-construction real estate than people give it credit for.
You see, the builders are offering schemes at various price points to attract buyers. At the same time the government is also working hand-in-hand with builders to make sure buyers’ interest is protected. There are many aspects to under-construction schemes that potential buyers can capitalise on.
Payment flexibility
Unlike ready-to-move-in properties, where you have to pay the whole amount in one shot, under-construction projects don’t require you to pay till one year after registering. You can pay the down payment and save money to plan your EMIs or interior plans. Another perk is that builders offer discounted quotations to potential buyers as an incentive. Builders also offer the chance to pick preferable locations, parking spaces, interior designs or customisations, and discounted society amenities for early birds. As a buyer, you can lock a price for your under-construction property and avoid paying higher prices as the project progresses.
Protected by RERA Act
First-time home buyers looking to invest in under-construction projects often fear getting scammed or the project being shut down. But the RERA—The Real Estate (Regulation and Development) Act, 2017—is built to save buyers from such mishaps. RERA-registered properties undergo strict audits and inspections regarding legality, quality, and timely delivery.
Highly appreciative investment
Multiple housing schemes in T1 cities’ top locations face a cap on their resell value. As per our study, we registered newly launched properties having a 25%+ premium over the resale properties. Meanwhile, the resell value of new property is soaring higher than ever. Of course, the growing residential development also gives rise to commercial development in the surrounding area.
This only adds to the resell value. If you are someone looking to merely invest, then under-construction properties with their perks might be ideal for reaping higher profits in the future.
And if you are a first-time buyer, investing in an under-construction property will guarantee high returns within 5 years of the launch. We recommend you thoroughly scout the localities to see potential under-construction projects that can give possessions within the next few years.
With large players like Lodha, Shobha, Godrej, Oberoi, Adani, etc., expanding marketing in all T1 cities, this might be a great time to buy a project under development.
Access to modern amenities
Builders today are not only focused on selling houses; they are inclined to sell luxury. Amenities like clubhouses, pools, sports clubs, and tech-adapted houses with modern infrastructure have become an excellent way for house owners to elevate their lifestyle and get an overall better state of mind.
These, however, are hard to attain in pre-owned properties, which are often in the middle of the city hustle-bustle. So, if you invest in an under-construction project, you will have early access to these resident-only amenities that are accessible and well-maintained throughout the year.
Customisation
Many new buyers prefer under construction properties as it gives them an opportunity to do the interiors to their liking. The scope for interiors in a resale property is limited and tedious, especially when approvals are required. First time buyers especially have this charm of designing their dream home. There is also the added benefit of price appreciation as the project nears completion for investors. They can take the route of just making the down payment and later selling at an appreciated price to maximise the ROI. Bare shell apartments hold greater appeal even in resale.
There are many benefits to that ‘work-in-progress’ building you’re looking to invest in.
While the process can be time-consuming and intimidating, there are multiple laws and regulations to protect you and your investments. Regardless, if you’re still unsure of how it pans out and looking to purchase a property in a well-developed locality, you can opt for the ready-to-move-in (RTMI) projects.
(The author is Cofounder and Chief Product & Technology Officer, NoBroker)