Mumbai, 17 December 2019: ANAROCK data reveals that the price gap between ready-to-move-in (RTM) and under-construction (UC) homes in the top 7 cities reduced to a mere 3-7% in 2019. The price disparity between the two categories is witnessing a y-o-y decline - in 2018, the difference was 5-9%; in 2017, it was around 8-12% across the top cities.
Cities with Least & Highest Price Difference in 2019:
"Previously, the ultimate selling proposition of under-construction homes was significantly lower prices over ready-to-move options," says Anuj Puri, Chairman - ANAROCK Property Consultants. "The RTM premium was primarily on the 'instant gratification' quotient, immediate freedom from rent and zero construction risk. In the last two years, the price gap between these two categories has eroded y-o-y. In 2017, the price gap in the top 7 cities was anywhere between 8-12%; this reduced to 5-9% in 2018 and sank further to 3-7% in 2019. Along with the other benefits that ready homes provide, they attract no GST."
This reducing price gap is highly favourable for end-users as well as investors. End-users prefer to see the end-product rather than a floor plan and are usually eager to get off the rental treadmill. Investors previously chose under-construction homes for their lower prices and the compounding capital appreciation as projects neared completion.
"Perhaps the main reasons for the reducing gap is that developers are reluctant to hike prices of ready properties amidst the overall slowdown," says Anuj Puri. "In a market scenario of limited housing sales, price hikes dampen homebuyer sentiments further. Ready unsold stock will not find many takers if prices increase."
The average price difference between RTM and UC homes in other top cities in 2019:
Among the top 7 cities, NCR and MMR saw the maximum RTM/UC price gap reduction in 2 years.
Anuj Puri, Chairman of ANAROCK Group is a highly respected industry authority and thought leader with 30 years' experience in leveraging Indian and global real estate opportunities. His company ANAROCK has a staff complement of over 1800 qualified and experienced professional, with offices in all major markets in the country, dedicated services in Dubai and a global footprint with over 80,000 preferred channel partners.