What is driving the surge in resale market?
The heightened desire for homeownership, catalyzed by the uncertainties of the pandemic, has fueled the surge in demand for ready-to-move-in properties. The findings of a recent Consumer Sentiment survey reveal that a significant 59% of homebuyers are actively seeking ready properties. However, a notable challenge arises as the ready inventory constitutes only a small fraction of the current housing stock with developers. In response, an increasing number of potential homebuyers are exploring the option of resale apartments. This trend is clearly reflected in online search patterns, with a substantial 65% of homebuyers actively seeking resale properties.
The shift towards resale properties can also be attributed to the less-than-ideal experiences of homebuyers with under-construction flats in the past. Issues such as project delays and defaulting developers were prevalent before the implementation of the Real Estate (Regulation and Development) Act (RERA). While RERA has introduced essential checks and balances for ongoing and upcoming projects, the primary driver for the surge in demand for resale properties remains the heightened preference for ready-to-move-in homes post-pandemic.
Is there a distinction in the pricing of new and resale properties?
In terms of pricing, new projects would be sold at higher price as compared to resale. However, the difference between new and resale properties has diminished since the pandemic.
In major cities, the price gap between resale and new homes has reduced from 10-15% in pre-pandemic times (2018-2019) to just 5-6% (2022-2023).
Although the prices are nearly equivalent, buyers opting for resale properties may forego flexible payment plans and discounts offered by developers.
What to look for when buying a resale property?
s prospective homeowners navigate this intricate landscape, the age-old question of how to discern the age of a property takes on renewed significance. Legal documents, such as agreement details, completion certificates, and occupancy certificates, serve as historical artifacts, unveiling the journey of a property from inception to completion. The age of a property, however, isn't solely encapsulated in legalities; it is intricately interwoven with maintenance and upkeep. Some seemingly young properties may bear the wear of time due to neglect, while older residences, meticulously cared for, exude a timeless appeal.
Beyond the legal labyrinth, prospective buyers are urged to cast a discerning eye on the neighborhood's prospects – assessing upcoming infrastructure and contiguous developments that could significantly impact the property's value. The maintenance and upkeep of the complex or gated community, alongside a meticulous examination of the property's physical condition, including fittings and potential repairs, provide a comprehensive understanding of the investment required.
With this one can take an informed decision of whether to buy a new or resale property. The decision ultimately hinges on the homebuyer's preferences and budget. For those seeking immediate occupancy, ready properties available in both secondary and primary markets are the ideal choice. Conversely, those willing to wait for 3-4 years for possession may consider under-construction properties.
Renuka Kulkarni, a seasoned real estate professional, brings over five years of diverse experience in research, consulting, and architectural design within the urban sector. Her expertise spans public and private projects, showcasing proficiency in real estate research, trend interpretation, and policy analysis. With qualifications in architecture and a master’s degree in Data Science (Business Intelligence & Data Analytics) from IIIT Bengaluru, along with an M. Tech in Urban Development and Management from TERI School of Advanced Studies, New Delhi, Renuka seamlessly blends data analytics with market insights, offering a holistic understanding of the industry in her research pieces.
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