A survey by Track2Realty has found that Indian home buyers are more interested in buying ready-to-move in properties rather than new and incomplete projects. The survey targeted the upper and middle class home buyers in 10 cities including Mumbai, Delhi, Bangalore, Calcutta, Ahmedabad, Chennai, Pune, Kochi, Patna and Chandigarh. Most of these buyers were educated professionals and were trying to buy property for the first time.
The survey pointed out that 74% of buyers would rather buy a property that was ready-to-move in, rather than a project which was still under development.
Some of the reasons given by the buyers included things like ease of projecting appreciation, reasonability of rates and charges levied by the builder, instant access to tax benefits, etc. More than half of the respondents who were home buyers also mentioned that they would prefer a ready property just because they can make a good decision based on the type of neighborhood and overall profile of a property.
So why is there a negative sentiment towards new projects and developments that have not been completed? Why would 7 out of 10 prospective home buyers in India negotiate a deal for an existing and ready-to-move in property rather than an unfinished project?
One of the first concerns seems to be delays. Construction may not happen as planned and there may be delays beyond the home buyer’s or the builder’s control. In the survey, 82% of buyers who bought properties in new projects are now regretting their decision because of delays in completion of the project.
An apparent ‘Over promising’ is also scaring away first home buyers from new developments. 72% of home buyers who did not prefer to buy new and unfinished projects complained about the lack of non-functioning amenities like club houses, swimming pools and under-equipped gyms. The buyers also show a lack of trust in builders as faulty construction and poor design were a major issue.
Benefits of buying Second Hand properties
Let’s drill into the psyche of the average property buyer who is an urban professional and is in the middle to upper class segment. Some of the obvious benefits of buying a ready-to-move in property align with the findings of the Track2Realty survey.
- Buyers can see for themselves the kind of construction and design they are paying money for.
- Home buyers can also survey the already functioning amenities that exist in the development.
- Municipal and builder levied charges are also clear to the buyer and there are little chances of surprises.
- There is virtually no chance of delays as the property has already been constructed.
- Buyers can see what the neighbourhood is like and the type of environment in the apartment complex or society development. It is easier to answer questions like "Will the children enjoy it here?", "Will it be a peaceful environment?" etc.
- As the property has already been owned and possibly lived in before, there are lesser chances of fraudulent paperwork.
- Appreciation of property prices is one of the top things on the mind of a property buyer. In case of completed and ready-to-move in properties, buyers get a good feel of the area, surroundings and infrastructure within and outside the development premises. It seems that the satisfaction of ‘what you see is what you get’ trumps over unknown certainties of buying properties that have not been fully constructed yet.
However it should be noted that first home buyers should not shy away from purchasing new developments. There may be inherent risks of buying a project which is under construction, but such purchases can reap big rewards and can be life-changing from a monetary perspective.
One of the basic precautions that home buyers can take is to buy from reputed builders. There are no guarantees that even India’s best construction company will deliver 100%. But buying a property in a development which is under the banner of a well known builder reduces the risk factor. Reputed builders survive on branding and delivering what they promise in terms of construction quality, amenities, etc as bad publicity can harm sales in future projects.