With the new real estate law (RERA) slowing new project launches and hampering the sale of under-construction projects, pioneer builders like Tata Housing, Lodha Group, Raheja Universal and Hiranandani Communities are aggressively promoting their ready to move properties, in contrast to the old practice of marketing new launches and under construction projects.
Ready to move in apartments with occupation certificates (OCs) are not included in the the goods and services tax (GST) and Real Estate (Regulation and Development) Act (RERA), which makes it much easier for developers to market athese products.
An outdoor campaign launched by Raheja Universal to sell their ready-to-move-in apartments in its few projects, that includes Raheja Reflections Odyssey and Raheja Ridgewood in suburbs of Mumbai. In the same way, the Lodha Group is promoting its “New Cuffe Parade”, luxury residential project in Mumbai, for its three completed towers. The Lodha advertisement says that “by buying apartments in these 3 towers you can save 12% on agreement as compared to the under-construction projects by paying 0% GST”.
“Builders are pushing to sell their ready-to-move-in properties and that is a clear drift from what was happening in the past. Since under-construction projects can not be marketed as they are required to be registered under RERA, builders are focusing on ready to move in projects as it is not included in the new law,” said Vikram Goel, chief executive officer, HDFC Realty Ltd, a property advisory arm of Housing Development Finance Corp. (HDFC).
Goel also said that while investments have reduced significantly in the last 2-3 quarters, users actually continue to buy, specifically ready-to-move-in apartments in the mid-income group range between Rs. 70 lakh to Rs. 1.5 crore. Recently, HDFC Realty started a campaign to help homebuyers purchase houses in finished projects across the Mumbai suburbs. The company is now planning to run similar type of initiative all over the country.
According to the chairman and managing director of Hiranandani Communities Niranjan Hiranandani, builders want to invest, finish the projects and then begin to market them in order to comply with RERA. The firm is also running an ad campaign for ready-to-move-in flats at Hiranandani Estate, residential project at Thane, Mumbai.
“The market is maturing. A large number of developers including myself, in many ways, are bringing finished products into the market place. Earlier, people didn’t care if the projects went slow or fast as the market was investor-driven and buying a property was mostly for investment per se,” Hiranandani said.
Last year has also seen buyers increasingly preferring for ready to move in properties over the under-construction ones due to the growing uncertainty in real estate market. As per the data compiled by Liases Foras, a property advisory firm, ready to move in properties currently account for 25% of the total housing sales in India. In last 12 months till 30 July, around 75,000 ready-to-move-in flats were sold in 51 cities of India.
MD of Liases Foras, Pankaj Kapoor said demand for ready properties has been rising gradually and is likely to increase in the next 6 to 12 months time. According to him, completed projects contributed around 5 percent to the overall sales 3 years ago.
Currently Tata Housing is also running advertisements on ready to move in projects for its 6 projects located in five cities including Mumbai Bengaluru. Similarly, several other smaller firms are running campaigns to sell ready projects.
Avneesh Sood, Eros Group Director, a Delhi-based real estate firm, said most of the buyers have been investors, though end-users are slowly coming back. “Though the market is slow, people are more willing to buy ready apartments and that is going to be the scenario going forward. Customers are ready to pay full down-payment and get the keys,” he added.