The price difference between under-construction and ready-to-move homes decreases to 3-7%.

According to property consultancy firm Anarock, in 2019, the price gap between ready-to-move-in (RTM) and under-construction (UC) homes has fallen to mere 3–7% in the top seven cities. There is a decline in the price differential between the two categories year on year. The difference in 2018 was around 5-9%, but in 2017 it was 8-12% in the top cities.

The lowest price difference between RTM and UC houses is recorded at 3% by the NCR (National Capital Region), Anarock data has revealed. RTM houses had an average price of Rs 4,530 per sq. ft. and for UC homes it was Rs 4,410 per sq.ft. At around 7%, Pune had the biggest price differential between RTM and UC.

RTM homes have an average price of Rs 5,600 sq.ft. and UC homes are priced at Rs 5,200 per sq. ft.

In the past, “the ultimate selling bid of under-construction homes was substantially lower than ready to move options,” says Anuj Puri, Chairman of Anarock Property Consultants.

Over the last couple of years, the price gap has eroded year-on-year. The RTM premium has primarily been on the ‘Instant Reward’ quotient, immediate freedom from rent and zero construction risk. “They do not attract GST along with the other benefits offered by ready residences,” Puri said.

For end-users and investors, this narrowing price gap is very helpful. End users would rather prefer to see the end product than a floor plan and would usually be interested to get out of the rental works. Investors traditionally preferred under-developed houses for their lower prices and their capital appreciation when the projects are close to completion.

“The main reasons for the decline are perhaps that builders are hesitant to increase prices for ready property in the context of the overall slowdown,” Puri said.

“Price hikes are damping homebuyer’s emotions in a constrained housing market scenario. Unsold inventories won’t find many customers if prices rise,” he said.

The price difference in Hyderabad in 2019 is 6%. In 2019, the average UC houses price was Rs 4,015 per sq. The RTM properties were Rs 4,250 per sq.ft. The price gap of Bengaluru was around 5%-UC homes cost Rs 4,820 per sq.ft. while RTM houses are Rs 5,050 per sq.ft.

Surprisingly, there was only 4 per cent price gap between under-construction and ready homes in the Mumbai Metropolitan Region (MMR), Chennai and Kolkata. In MMR, UC homes currently have an average price of Rs 10,075 per sq.ft. The property of RTM at Rs 10,460 per sq. ft.

Today, UC homes in Chennai average price is Rs 4700 per sq.ft. and for RTM houses it is Rs 4,880 per sq.ft. Presently, the average price of UC houses is Rs 4,265 per sq.ft in Kolkata. And Rs 4,420 sq.ft for ready homes, it was reported.