The Indian residential real estate market has undergone significant transformations in recent years. One notable trend is the increasing preference for ready-to-move-in (RTMI) housing properties.
Our latest consumer survey findings denote that 59 percent of respondents are actively seeking RTMI properties in the coming six months, representing a marginal decrease from 61 percent in the first half of 2023. This sustained interest in RTMI properties is indicative of a profound change in homebuyer preferences.
This shift in buyer behaviour is driven by various factors, including a history of issues with under-construction projects, the impact of the Real Estate (Regulation and Development) Act (RERA), and the changing dynamics brought about by the COVID-19 pandemic. Let’s delve into these factors and analyse why more homebuyers are opting for RTMI properties.
Trust Deficit in Under-Construction Properties
For several years in the past, the Indian real estate market grappled with challenges like defaulting developers, legal disputes, and delayed project completions. These issues eroded the trust of homebuyers in under-construction properties. Buyers were often left in limbo, uncertain about when or even if they would receive possession of their homes. The implementation of RERA aimed to bring more transparency and accountability to the industry, but the trust deficit still lingers.
The Impact of RERA
The RERA, introduced in 2016, brought about significant reforms in the real estate sector. It mandated developers to register their projects with RERA, provide detailed project information, and adhere to project timelines. While RERA has streamlined processes and improved transparency, potential homebuyers remain cautious about investing in under-construction properties due to the legacy of past issues.
The Pandemic’s Influence
The COVID-19 pandemic brought about a paradigm shift in the way people view their homes. The need for safety, security, and a comfortable living environment became paramount. As remote work and social distancing became the norm, homeownership gained greater significance. Many individuals who were previously on the fence about buying a property decided to take the plunge. Not surprisingly, the preference was largely in favour of RTMI homes.
Why do Homebuyers Prefer RTMI Properties?
One of the most significant advantages of RTMI properties is that buyers can move in almost immediately after completing the purchase.
These properties typically come with fully developed infrastructure and amenities, providing residents with immediate access to essential services and facilities. This eliminates the anxiety and uncertainty associated with waiting for project completion. It also saves buyers the cost and inconvenience of renting an interim residence.
Additionally, with an RTMI property, buyers have a tangible asset in hand. They can physically inspect the property and assess its condition before making the purchase. This reduces the risk of investing in a property that might not meet expectations, as can sometimes happen with under-construction projects. RTMI properties also spare buyers from financial strain and mental stress owing to delayed completion, making the entire homebuying process smoother and less taxing.
Another major factor is that in the case of under-construction properties, buyers are subject to the Goods and Services Tax (GST) on the property’s cost. RTMI properties, on the other hand, are not subject to this tax, resulting in cost savings for the buyer.
Conclusion
The increasing preference for RTMI housing properties in India reflects a fundamental shift in the priorities of homebuyers. Past issues with under-construction projects, the influence of RERA, and the impact of the COVID-19 pandemic have led homebuyers to prioritize immediate possession and reduced risk, making RTMI properties the preferred choice. As this trend continues to gain momentum, developers and the real estate industry as a whole must adapt to meet the evolving demands of discerning homebuyers.
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