RERA ef­fect: Devel­op­ers rush to sell ready-to-move-in prop­er­ties

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Bidya Sa­pam bidya.s@livemint.com

MUM­BAI: Zero GST. OC ob­tained. Ready-to-move. If you open any news­pa­per th­ese days, you’re likely to see ads from builders, big and small, hawk­ing fin­ished homes, where you can pay up and move in. No wait­ing, no con­struc­tion risks, and no need to pay loan in­stal­ments and rent while your house gets built.

With a new real es­tate law slow­ing new launches and sale of un­der-con­struc­tion projects, large builders like Lodha Group, Tata Hous­ing, Hi­ranan­dani Com­mu­ni­ties and Ra­heja Univer­sal are ag­gres­sively pro­mot­ing ready prop­er­ties, in sharp con­trast to the es­tab­lished prac­tice of mar­ket­ing new launches and projects un­der con­struc­tion.

Ready-to-move apart­ments with oc­cu­pa­tion cer­tifi­cates (OCs) are kept out of the purview of the Real Es­tate (Reg­u­la­tion and De­vel­op­ment) Act (RERA) and the goods and ser­vices tax (GST), mak­ing it much eas­ier for builders to mar­ket th­ese prod­ucts. Ra­heja Univer­sal has launched an out­door cam­paign to sell its ready-to-move apart­ments in a few of its projects, in­clud­ing Ra­heja Ridge wood and Ra­heja Reflections Odyssey in Mum­bai’s sub­urbs. Sim­i­larly, the Lodha Group is pro­mot­ing “New Cuffe Pa­rade”, a lux­ury res­i­den­tial project in Mum­bai, for three of its com­pleted tow­ers. The Lodha ad says that buy­ing apart­ments in th­ese three tow­ers “can save 12% on agree­ment com­pared tounder-con­struc­tion projects by pay­ing 0% GST”. Both Lodha Group and Ra­heja Univer­sal de­clined to com­ment.

“Builders are push­ing to sell ready-to-move-in prop­er­ties and that is a drift from what has hap­pened in the past. Since un­der- con­struc­tion projects could not be mar­keted as they need to be reg­is­tered un­der RERA, devel­op­ers are fo­cussing on ready projects as it does not fall un­der the new law,” said Vikram Goel, chief ex­ec­u­tive of­fi­cer, HDFC Re­alty Ltd, a prop­erty ad­vi­sory arm of HDFC.

Goel said while in­vest­ments have slowed down in the last two-three quar­ters, ac­tual users con­tinue to buy, par­tic­u­larly ready-to-move-in apart­ments in the mid-in­come range be­tween Rs70 lakh to Rs1.5 crore.

Ac­cord­ing to Niranjan Hi­ranan­dani, chair­man and man­ag­ing di­rec­tor, Hi­ranan­dani Com­mu­ni­ties, builders are now will­ing to in­vest, com­plete the projects and then of­fer them to the mar­ket in or­der to com­ply with RERA.

The com­pany is also run­ning an ad cam­paign for its ready-to­move-in apart­ments at Hi­ranan­dani Es­tate, a res­i­den­tial project at Thane in Mum­bai.

The last one year has also seen con­sumers in­creas­ingly opt­ing for ready prop­er­ties over un­der­con­struc­tion ones due to grow­ing un­cer­tainty in the real es­tate mar­ket.

As per data com­piled by prop­erty ad­vi­sory firm Li­ases Fo­ras, ready prop­er­ties ac­count for cur­rently 25% of the to­tal hous­ing sales in the coun­try. In the last 12 months ended 30 July, around 75,000 ready-to-move-in apart­ments were sold across 51 cities in In­dia.

Pankaj Kapoor, MD of Li­ases Fo­ras, said de­mand for ready prop­er­ties has been grad­u­ally ris­ing and is likely to soar in the next six to 12 months pe­riod. Ac­cord­ing to him, com­pleted projects con­trib­uted just about 5% to the over­all sales three years ago.

Tata Hous­ing is also cur­rently run­ning ad­ver­tise­ments on ready projects for six of its projects lo­cated in five cities in­clud­ing Delhi-NCR, Mum­bai and Bengaluru. Sim­i­larly, sev­eral smaller firms are run­ning cam­paigns to sell com­pleted projects.

MINT/FILE

With the new law slow­ing launches and sale of un­der­con­struc­tion projects, builders are pro­mot­ing ready prop­er­ties

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