Why Under-Construction Projects Charm the Home Buyers Despite Completion Delays
Nov 29, 2019 Home Trading Steps
When it comes to buying a property, homebuyers want to make sure that their investment is in safe hands. They leave no stone unturned to make sure that the project they are investing in is worth their money and effort. There was a time when project delays did not exist. But now with many upcoming and under-construction projects, project completion delays have become a standard scenario. Most buyers who invest in under-construction homes are prepared to get their home handed over later than the promised time frame.
Most projects are delayed due to permissions from the government authorities, or the builder runs out of money to keep the project going. Currently, there are around 8.5 lac units stuck in various stages of under construction. It was expected that the mounting cases of project delays, developers going bankrupt and other laws in place, the buyer will show interest in ready to move in or resale properties. However, the data shows the opposite.
According to the reports in the second quarter of the FY20, 73% of units sold in the NCR region were under-construction properties. The scenario is the same with Mumbai, where 83% of under-construction units were sold.
It raises one question. Why are homebuyers more inclined towards investing in under-construction properties even though there are project delays?
The resale property will find many takers and there are good chances that the resale property will be in an excellent or prime location. Hence the cost of the same will be higher than others. The home buyer will have to make changes in the resale property to fit their needs. There are chances that the old construction will not be of any use, and the buyer will have to start from scratch, adding to the cost of the property. The under-construction property, however, is located in the suburbs with a price tag that is easy on the pocket. The home buyer will not have to make any changes in the under-construction property as the unit will be new and freshly constructed.
When it comes to taking a home loan, the banks prefer to give out loans for the new or under- construction property as compared to the old property or resale property. The age of construction matters to the bank, and they take every caution to make sure they are giving out loans for a property that will give them the return.
It is an emotional feeling, too for the home buyers to move into a freshly constructed home that has never been lived before.
Most projects are delayed due to permissions from the government authorities, or the builder runs out of money to keep the project going. Currently, there are around 8.5 lac units stuck in various stages of under construction. It was expected that the mounting cases of project delays, developers going bankrupt and other laws in place, the buyer will show interest in ready to move in or resale properties. However, the data shows the opposite.
According to the reports in the second quarter of the FY20, 73% of units sold in the NCR region were under-construction properties. The scenario is the same with Mumbai, where 83% of under-construction units were sold.
It raises one question. Why are homebuyers more inclined towards investing in under-construction properties even though there are project delays?
The resale property will find many takers and there are good chances that the resale property will be in an excellent or prime location. Hence the cost of the same will be higher than others. The home buyer will have to make changes in the resale property to fit their needs. There are chances that the old construction will not be of any use, and the buyer will have to start from scratch, adding to the cost of the property. The under-construction property, however, is located in the suburbs with a price tag that is easy on the pocket. The home buyer will not have to make any changes in the under-construction property as the unit will be new and freshly constructed.
When it comes to taking a home loan, the banks prefer to give out loans for the new or under- construction property as compared to the old property or resale property. The age of construction matters to the bank, and they take every caution to make sure they are giving out loans for a property that will give them the return.
It is an emotional feeling, too for the home buyers to move into a freshly constructed home that has never been lived before.
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