What should You Go For? A New or Resale Home?
By Magnolia Realty | Sep 25, 2020
You just can’t zero down immediately to one option when it comes to a decision whether you buy a resale or new property. You need to evaluate lots of things, depending on a number of factors, for example, in highly developed primary markers, sometimes it is extremely difficult to find good options. In urban primary markets where lands are too limited, and the available ones are highly expensive, owning a home in prime areas becomes a difficult proposition. In that case, a new property just outskirt of the dominant zone would be a wise decision.
Pros and Cons of Brand-New Property
The biggest advantage of purchasing a new home is the availability of choices. If you are particular about the choices, a new home or under construction project will give you a wide range of choices to select a unit based on your preferences. Moreover, a new home comes with new and modern fixtures and fittings.
A resale property may be good but it doesn’t feature the latest technology. Here a new property will score better than a resale one. If you have time with you, it is better to look at different options in under-construction properties because you will always find better user-friendly and space-optimized houses.
Another advantage of a new property is most of these properties showcase today’s trend of go-green attitude, so these properties are most energy-efficient.
In terms of finance, things are also simplified in new properties because you just need to pay about 10-20% as the upfront cost and remaining as the construction progresses. This will give you some leeway to manage finance in a better way.
Lastly, with RERA/HIRA in place, developers have the liability to fix the structural defects for five years after handing over the property.
Pros and Cons of Resale Property
As mentioned earlier, with the scarcity of lands, primarily markets are saturated with lots of existing properties so there is less space for a new residential project. Mostly, new residential projects are located just outskirt of the primary locations, so in that case, resale property emerges as a viable option.
Moreover, there is no waiting period for a resale property, so one can evade the risk of project delay.
You can also assess the neighbourhood, neighbours and other details. There is also better clarity on the maintenance charges.
Resale v/s Under-Construction
Price: Resale is more expensive, 30% higher than under-construction
Risk Return: Lower Risk, lower return in resale property, whether under-construction properties have low risk but high return
Payment Time: Upfront within 1-2 months for a resale property but you will have the flexibility of payment in under-construction because it is linked with the construction schedule.
Choice: Resale properties are limited by availability but in case of a new property, you will have a wider choice.
Tax Benefits: In case of resale or ready-to-move-in properties, there is an immediate tax benefit (80C, section 24). For Under-construction project, tax benefits will start after possession.
RERA/HIRA: For resale properties, RERA/HIRA is not applicable, whether it is applicable for under-construction property.