It is common to find aspiring buyers lining up to book spaces in residential projects that have just been launched. The reason of course is the perceived advantage in pricing and the comfortable payment schedules that span over two to three years depending on the gestation period of the project.
Lately, with developers offering incentives to offload existing stock and reduce their inventory holding, the prospect of purchasing ready-to-move-in apartment units has become equally attractive; more so with a sizeable number of developments overshooting their handover dates, leaving the customer uncertain besides running up their holding costs.
With builders currently holding a sizeable quantum of unsold stock, will the coming months see customers warming up more towards completed units rather than pre-launch offers?
Says Sales and Marketing professional Debanjan Mukherjee who purchased a completed unit from Provident Housing, a subsidiary of the Puravankara Group, “Completed units are preferable as they remove the uncertainty of waiting period and the unexpected delays in completion as is happening too often currently. While the units do prove to be more expensive, the interest paid during the waiting period combined with rental overflows mostly compensates this. At the end the fund outflow is more or less similar while you have the opportunity to move in soon after purchase.”
He further adds, “This sentiment would be shared more by customers who are able to make cash-down payment instead of resorting to bank loans.”
More attractive
Concurs finance professional Tathagata Sarkar who purchased a completed unit from the Brigade Group, “While the actual purchase is dependent on individual financial capability, the loans and EMI paid during the intervening period of pre-launch purchase also adds to the cost besides locking up funds. When funds are available, it is more attractive to buy a completed unit rather than wait three to four years for its completion.”
Software professional Pavithra D. Pradhan shares similar sentiments on her purchase from Shriram Properties.
“We were personally sceptical about pre-launch offers given the delays and ensuing cost overruns. This was a completed unit with the facilities and design that suited our expectations. The finished state also gave us a fair idea of the quality the unit offered. In our view, opting for a unit that is at least 90 per cent complete is a safer venture than choosing at the pre-launch stage with its uncertainties.”
IT professional Shailesh Kumar, who purchased a completed unit from Shriram Properties, voices similar thoughts. “The completed state gave a clear picture of the layout, the exterior landscape and the way the project will finally evolve. While cost overruns of delays are avoided, there is also savings in rent as the unit is ready to move in on purchase.”
Sums up retired finance professional Ram who purchased a high-end property from Brigade Group, “It finally boils down to individual perspective and financial situation. In my case it was a purchase after having sold an existing property. It seemed more prudent to buy a completed unit and move in immediately as funds were available for immediate investment.”
“But if the financial commitments are different, where savings over a period are used and a bank loan is solicited, a pre-launch unit would appear more attractive. The final sway of the demand will be determined purely based on individual situation as well as inclinations.”
While clearly the direction of demand is individual centric, there is a significant segment of the market that is looking for ready to move-in homes.
Builders should be able to tap this segment effectively to offload their holding stock in the coming months.
