Demand for ready homes on the rise

Ready-to-move-in houses have been moving faster than under-construction homes in the realty market for the past two years. Though residential sales have plummeted due to the pandemic, customers now increasingly prefer readyto-move-in units. The trend is expected to reduce unsold stocks this year.

In 2017-18, ready-to-movein units accounted for 8 to

10 per cent of the residential sales. It had moved up to 20 to 25 per cent in 201920. Availability of inventory coupled with a narrowing price gap between the two had helped sales of ready-to-move-in houses in the past couple of years.

"Under RERA, developers are careful about completing existing projects without delay rather than announcing newer projects. The subdued demand situation also makes them cautious about new launches. This has increased availability of ready-tomove-in units in the markets," said Mani Rangarajan, Group COO, Housing.com, Makaan. com and PropTiger.com.

Further, the price gap between ready-to-move-in and under-construction homes in the top 7 cities has been reducing in the past two-three years. By

2019, the price gap had come down to 3-7 per cent. In 2018, the difference was

5-9 per cent and in 2017 it was around 8-12 per cent.

Ready-to-move-in houses usually demand a premium on the 'instant gratification' quotient, freedom from rent and zero construction risk. They also do not attract GST. However, in the last twothree years, the price-gap between these two categories has shrunk, as the developers are reluctant to hike prices of ready properties amidst the overall slowdown. "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," finds Anuj Puri, chairman of Anarock.

The pandemic has further squeezed the demand for residential properties. Customers now do not want to pay a pre-EMI and wait for completion. A recent survey by Housing. com found that 60 per cent of the first-time home-buyers preferred ready-tomove-in houses.

Unsold inventory stood at

31 per cent of sales in 201718 but this came down to 27 per cent by March 2020 and is expected to further come down this year.