The price gap between ready- to-move-in (RTM) and under-construction (UC) homes in top seven cities of the country has dipped to a mere 3-7 per cent in 2019, according to property brokerage firm Anarock.
The price disparity between the two categories is witnessing a year-on-year decline.
In 2018, the difference was 5-9 per cent; in 2017, it was around 8-12 per cent across the top cities.
The average prices of RTM homes were Rs 4,530 per sq. ft. while for UC homes it was Rs 4,410 per sq.ft.
Pune had the highest price difference between RTM and UC homes at around seven per cent.
The average price of RTM homes is Rs 5,600 per sq.ft. and UC homes are priced around Rs 5,200 per sq. ft.
Previously, the ultimate selling proposition of under-construction homes was significantly lower prices over ready-to-move options," says chairman, Anarock Property Consultants, Anuj Puri.
"The RTM premium was primarily on the 'instant gratification' quotient, immediate freedom from rent and zero construction risk. In the last two years, the price gap between these two categories has eroded y-o-y," he said.
"Along with the other benefits that ready homes provide, they attract no GST," Puri noted.
This reducing price gap is highly favourable for end- users as well as investors.
End-users prefer to see the end-product rather than a floor plan and are usually eager to get off the rental treadmill.
Investors previously chose under-construction homes for their lower prices and the compounding capital appreciation as projects neared completion.
"Perhaps the main reasons for the reducing gap is that developers are reluctant to hike prices of ready properties amidst the overall slowdown," said Puri.
"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," he said.
In Hyderabad, the price difference in 2019 is six per cent. The average price of UC homes in 2019 was at Rs 4,015 per sq. ft. while those of RTM properties was Rs 4,250 per sq. ft.
Bengaluru witnessed a price gap of around five per cent - UC homes cost Rs 4,820 per sq.ft. and RTM homes are Rs 5,050 per sq. ft.
Mumbai Metropolitan Region (MMR), Chennai and Kolkata saw a price disparity of just four per cent between ready and under-construction homes.
In MMR, the current average price of UC homes is Rs 10,075 per sq.ft. while RTM properties are priced at Rs 10,460 per sq. ft.
In Chennai, average prices of UC homes currently are at Rs 4,700 per sq.ft. and Rs 4,880 per sq. ft. for RTM homes.
In Kolkata, the average price of UC homes is currently is Rs 4,265 per sq.ft. and Rs 4,420 per sq. ft for ready homes, it was noted.