The price difference between completed apartments and under-construction flats has narrowed down to 3-5 per cent as against 9-12 per cent in the calendar year 2017, as prospective homebuyers’ preference is shifting towards ready-to-move-in units due to risk factor, according to Anarock.
According to a report by Anarock, one of the leading property consultant in India, the average price of ready-to-move-in units is higher by 3-5 per cent across seven major cities in comparison with the under-construction residential properties.
In the national capital region (NCR), the average price of completed units is Rs 4,650 per sq ft, while under-construction flats cost Rs 4,500 per sq ft.
The average price of ready flats in Kolkata is Rs 4,465 per sq ft, up 4 per cent from Rs 4,300 per sq ft for under-construction units.
In the Mumbai Metropolitan Region (MMR), the average prices of completed and under-construction flats are Rs 10,700 and Rs 10,350 per sq ft, respectively.
The average rate of ready apartments in Pune is Rs 5,650 per sq ft, up 5 per cent from Rs 5,360 per sq ft for units under construction.
In Hyderabad also, the price difference is 5 per cent. The average rates of completed and under-construction apartments are Rs 4,290 and Rs 4,075 per sq ft, respectively.
The average rate of ready-to-move-in flats in Chennai is Rs 5,000, while under-construction units cost Rs 4,775 per sq ft.
In Bengaluru, the average prices of finished and under-construction inventories are Rs 5,130 and Rs 4,910 per sq ft.
Anarock Chairman Anuj Puri said, “Previously, buyers of under-construction homes had one major advantage. Their patience and willingness to court construction risk were rewarded by notably lower prices.”
However, he pointed out that prospective homebuyers have become risk averse due to construction delays and stalled projects and now, demand has tilted heavily towards ready properties.
Moreover, Puri said completed homes do not attract GST has been an added attraction.
“…Even the price gap between ready-to-move and under-construction homes has eroded substantially, from 9-12 per cent in 2017 to just 3-5 per cent by January-March quarter 2021,” he said.
Anarock said the narrow price gap works well for end-users as well as investors.
End-users can see what they buy and save rent by moving in immediately, while investors focused on steady rentals can start earning right away.
In the past four years, developers have been reluctant to increase the prices of ready homes as they need to clear their inventory.
As per the data, the MMR has seen the highest reduction in the gap over the last four years. In 2017, the gap between completed and under construction homes in MMR was 12 per cent but the same has reduced to just 3 per cent now.
In Bengaluru, the price gap was 12 per cent in 2017 but now, it has shrunk to 4 per cent.
Similarly, in Pune, the price gap in 2017 stood at 12 per cent, while in the first quarter of 2021, it has reduced to 5 per cent.
In NCR, the price gap in 2017 was 9 per cent and now, it is just 3 per cent.
Anarock data showed that the price gap in Hyderabad has come down from 10 per cent in 2017 to 5 per cent in January-March 2020.
In Chennai, the price gap in 2017 was 9 per cent and now, it has come down to 5 per cent. The rate difference between the two categories in Kolkata reduced from 10 per cent in 2017 to 4 per cent in Q1 2021.
Mumbai-based Anarock clocked an 18 per cent growth in its revenue at Rs 302 crore in the last financial year despite the COVID-19 pandemic, Puri told in an interview on April 11.
The consultant sold 14,700 units worth Rs 16,240 crore on behalf of developers in the financial year 2021, he had said.
Anarock, which was founded in April 2017, has offices in major Indian cities and two offices in the UAE to tap non-resident Indians looking to buy real estate in India.
Apart from housing brokerage, Anarock is into capital market advisory, leasing of retail space, sale of office properties, consulting business and digital real estate solutions.