Ready vs Under-Construction Property: Key Differences 2024

    Ready-To-Move-In or Under-Construction Property: Which One Should You Choose?

    By SQUAREA Knowledge Hub

    Published: March 5, 2024

    Real Estate in Pune - Ready-To-Move-In or Under-Construction Property: Which One Should You Choose?

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    With an abundance of options available, one of the first decisions prospective home buyers must make is whether they should opt for a ready-to-move-in or under-construction property. Which is better – under-construction or ready-to-move-in?

    With an abundance of options available, one of the first decisions prospective home buyers must make is whether they should opt for a ready-to-move-in or under-construction property. Which is better – under-construction or ready-to-move-in?

    Ready-To-Move-In Properties

    As the name suggests, ready-to-move-in properties are finished residential properties that you can start enjoying immediately. But are they the right choice for you?

    Pros

    Instant Access: One of the major benefits of ready-to-move-in property is virtually zero waiting period. You can immediately move in after making the payment and completing the necessary documentation. This relieves you of the stress of having to pay both rent and EMIs as you wait for possession.

    You Get What You See:In ready-possession homes, you get precisely what you see. There is no chance that what you saw during the visit will change once you move in. So you have the opportunity to check for the features you want and choose the home best suited to your vision.

    No GST:The GST on under-construction property applies only to properties that are still in progress. In contrast, GST is not applicable on ready-to-move-in properties, making them more cost-effective at the final purchase stage. Additionally, you can immediately start claiming tax benefits if you use a home loan to purchase a ready-possession home.

    Learn From the Locals: You can interact with the locals to understand their experience living in the area, check the social infrastructure and connectivity, and see if this is the right community for you. You can also understand any potential issues you may face and decide whether the property is worth investing in.

    Cons

    – High Costs: Ready-to-move-in properties often sport a costlier price tag, often 20% to 30% higher than under-construction property.

    – Construction Quality: You have no way of verifying the construction quality, analyzing the project development, and learning about the materials when buying a finished apartment. You will have to rely on visual checks and the word of the seller to gauge construction quality.

    – Property Age: Buying a ready-to-move-in property does not guarantee you a brand-new home. The apartment may not have been put on sale for a while, it might have been on the market for some time, or previous owners may not have maintained it well. All these factors contribute to the home appearing old.

    – Lack of RERA Registration: Older properties, with occupancy certificates issued before 1st May 2016, are not covered under the RERA Act. Therefore, the responsibility of proper due diligence and access to the relevant information from public platforms falls on the buyer.

    Under-Construction Properties

    Compared to ready-to-move-in homes, under-construction properties are in various stages of completion and still have some work to do. If you are ready to wait, is buying under-construction property in India a better option for you?

    Pros

    – Lower Costs: When compared with ready-possession properties, under-construction properties can be anywhere between 10% and 30% cheaper. If you are on a tight budget and are ready to wait, this price difference can be worthwhile.

    -Higher Appreciation: Property prices go up as the construction progresses. Additionally, improvement in local infrastructure during this time can also increase overall property values. So if you are looking for a higher return on investment, purchasing a property in the early stages of construction makes more sense.

    -Flexible Payment Options: An under-construction property offers much more flexible payment options than a finished property. For example, you can reserve the property with a small down payment and pay the balance on possession or make partial payments as the construction progresses.

    -New Construction: If you want to live in a brand-new home with no maintenance issues and a long life, under-construction properties are the way to go. They also give you access to the latest amenities, services, and design trends for a trendy home.

    RERA Compliance: Every property with an occupancy certificate issued after 1st May 2017 has to be registered under RERA. Therefore, all under-construction properties fall under RERA authority and are required to abide by its principles and ethical business practices. You can easily get information about new under-construction projects on the RERA portal.

    Offers: Since there is a wait to move into under-construction properties, builders often run promotions and offers to attract buyers. So you have the option to not only look for the home design and amenities you want but to find the most attractive offers as well.

    Cons

    – Greater Risk: Under-construction properties are higher-risk investments as builders may fail to deliver on schedule or – in the worst-case scenario – fail to deliver the project due to lack of resources. So researching the builder and choosing a reputed real estate developer is essential when investing in under-construction properties.

    – Disparity Between Design and Finished Product: With under-construction properties, you run the risk of not receiving the promised amenities, altered layouts, or insufficient usable space at the time of possession.

    – GST and Tax Implications: GST on under-construction property is applicable – 1% for homes priced under INR 45 lakh and 5% for properties worth more than INR 45 lakh – in addition to stamp duty and registration fees. Additionally, you also cannot claim tax benefits for under-construction properties until possession. However, the interest you pay on a home loan is tax-deductible (up to INR 2.5 lakh) if you move in within three years of securing the loan.
    Ready-to-move vs under-construction property – both options have their advantages and drawbacks. You need to assess your unique situation and decide which option suits your needs the best. If immediate possession and minimal risk appeal to you, go with a ready-to-move-in home. If cost savings, future appreciation, and customization matter more, under-construction might be your choice.

    Looking for a property to suit your lifestyle? Get in touch with the Squarea team today to find the ideal home for you

    For more details on this subject, please email hello@squarea.io

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    How Dubai’s Real Estate Model Offers Insights for India’s Next Growth Phase
    Dubai’s transformation into a global real estate powerhouse provides valuable insights for rapidly evolving markets, such as India. In just two decades, Dubai has built a property ecosystem grounded in transparency, accessibility, and investor trust, attributes that have turned it into a magnet for global capital. India’s property sector is now entering a similar phase of structural maturity, driven by regulatory reforms, expanding institutional participation, and rapid urbanisation. The conversation, therefore, is not about comparison but perspective – identifying elements of Dubai’s success that can complement India’s growth and strengthen its path towards global competitiveness.

    Insights from Dubai: Strengthening India’s Real Estate Future

    Several pillars define Dubai’s success, right from investor accessibility and transparency to yield efficiency and urban planning, each offering lessons that can inform India’s next phase of real estate growth.

    Accessibility and Investor Confidence

    Dubai’s property market is built on openness. Foreign nationals can own property outright in designated freehold zones, enjoying full rights of sale, lease, and transfer without requiring residency or citizenship. This inclusivity unlocked global participation and set a precedent for investor-friendly policy (Sobha Realty). India has made significant progress through FDI liberalisation and the implementation of RERA, which has strengthened buyer protection and market discipline. The next step lies in simplifying ownership structures and approval processes to further attract cross-border and NRI capital. Accessibility initiates investor participation, and trust in governance sustains it. Once ownership structures encourage participation, the next step is ensuring transparency that underpins long-term confidence.

    Transparency as a Growth Pillar

    Dubai ranks third globally in JLL’s 2024 Global Real Estate Transparency Index, reflecting a decade of reform in land registration, digitalisation, and data accessibility. This consistency of governance allows investors to evaluate risk and reward with clarity, a cornerstone of long-term participation (JLL). India has made meaningful strides through RERA and the ongoing digitisation of land and property records. The next phase lies in creating a more unified national framework that ensures these standards are consistently applied across states. As Dubai’s model shows, transparency is not just about access to information; it is about predictability and confidence that attract long-term capital. Transparency sets the stage for performance, and that’s where yield efficiency becomes the next critical differentiator.

    Yield Performance and Market Efficiency

    Dubai’s rental yields, averaging between 7% and 11%, are among the world’s highest. Indian metros such as Mumbai and Bengaluru, by contrast, average 2% to 4%. With property prices often comparable, a 2,500 sq. ft. apartment in Dubai may cost AED 1.5-3.5 million, similar to Mumbai or Gurugram’s prime districts. Dubai’s advantage lies in process efficiency, consistent occupancy, and investor-centric regulations. (Financial Express) For India, the opportunity lies in strengthening the rental housing ecosystem and scaling institutional platforms that make income-generating real estate more accessible. A stable rental framework not only enhances yield potential but also attracts long-term domestic and international capital. Financial clarity is essential, but so is policy simplicity, a domain where Dubai’s fiscal structure offers useful direction.

    Simplified Taxation and Policy Clarity

    Fiscal simplicity remains one of Dubai’s strongest differentiators. There is no tax on rental income or capital gains, and only a 4% transfer fee applies (Shuraa Tax). This transparency allows investors to plan and price with confidence, encouraging long-term participation. India’s tax environment, though improving, remains complex. Streamlining capital gains treatment, aligning stamp duties, and ensuring consistency across states could help build similar confidence. Predictability in taxation not only protects returns but also signals maturity in governance, a crucial element for global investors. As regulation and taxation evolve, the next frontier lies in city planning, where infrastructure and design turn policy into value.

    Integrated Urban Planning and Long-Term Value

    Dubai’s urban growth is guided by a unified master vision. Developments such as Business Bay, Downtown Dubai, and Dubai Marina integrate residential, commercial, and leisure spaces supported by transport and infrastructure. The result is a city designed for both liveability and investment continuity. India is already moving towards this model through integrated township policies, metro corridor development, and the Smart Cities Mission. Scaling such initiatives with consistent execution can drive both capital appreciation and social value. Infrastructure, as Dubai proves, is not a secondary input, it is the foundation on which long-term real estate value is built.

    A Shared Vision For Real Estate Excellence

    Dubai’s experience demonstrates how disciplined governance and investor-first policies can transform an entire market. India’s story, meanwhile, is one of scale, innovation, and demographic strength. For India, the opportunity lies in adaptation, not imitation - refining its frameworks while embracing global best practices in transparency, planning, and fiscal clarity. At SQUAREA, our curated portfolio spans high-value properties across India and Dubai, from premium developments in India’s leading cities to landmark projects in Dubai’s most sought-after districts. Each asset is evaluated for transparency, yield potential, and long-term appreciation, enabling you to build a portfolio that strikes a balance between stability and opportunity. To explore exclusive investment options tailored to your goals, reach us at hello@squarea.io or call +91 90 9641 9641.
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    The Role of Due Diligence in High-Value Real Estate Transactions
    In India’s high-value real estate segment, where transactions often run into tens or hundreds of crores, a property purchase goes far beyond ownership transfer; it is a statement of legacy and trust. Yet, the larger the investment, the higher the stakes. Even one missed verification or unclear approval can turn a lucrative deal into a long-term liability. For discerning investors, due diligence has become the cornerstone of informed decision-making. It is not a formality. It is a strategic process that ensures the asset being acquired is legally sound, structurally compliant, and financially transparent.

    Understanding Due Diligence In Real Estate

    Due diligence in real estate is the foundation of an informed investment. It ensures that every property stands on legal, financial, and structural integrity before capital is deployed. The process involves verifying ownership history, regulatory approvals, financial obligations, and physical conditions, providing complete clarity on what is being acquired and under what risks or commitments. In high-value transactions, this process extends beyond documentation. It enables investors to identify potential risks early, gauge the asset’s true readiness, and ensure that it aligns with their long-term investment strategy. As transactions grow in scale and complexity, due diligence must evolve across multiple dimensions: legal, regulatory, financial, and technical. This confirms that each acquisition is both compliant and future-ready.

    Key Dimensions Of Real Estate Due Diligence

    Due diligence is multi-faceted, covering legal, regulatory, financial, and technical layers. Each protects the investor differently.

    Legal and Title Verification

    This involves tracing ownership history through title deeds and encumbrance certificates while checking for disputes or claims. Establishing an unbroken ownership chain and marketable title ensures clear rights of transfer and financing flexibility.

    Regulatory Compliance

    Every luxury or commercial property must meet statutory benchmarks, from RERA registration and sanctioned plans to environmental and fire safety clearances. Compliance with municipal laws and building norms prevents costly penalties or restrictions on occupation.

    Land Use and Zoning Compliance

    Understanding land-use permissions is critical, especially for large parcels. Verifying zoning certificates, conversion from agricultural to non-agricultural use, and Development Control Regulations (DCR) compliance ensure the property aligns with approved usage and future development potential.

    Financial and Tax Review

    A financial audit identifies pending property taxes, loans, or encumbrances that could transfer liabilities to the buyer. It also helps investors evaluate capital gains implications and maintain efficiency in post-acquisition cash flows.

    Technical and Environmental Checks

    A technical review examines construction quality, structural integrity, and maintenance practices. Simultaneously, environmental due diligence ensures that the project complies with water, waste, and emission standards, which are increasingly vital as ESG benchmarks influence the desirability of assets. Together, these assessments provide a complete picture of the asset’s authenticity and performance, forming the basis for the document verification that follows.

    Documents Typically Reviewed During Due Diligence

    · Title deeds, sale agreements, and ownership records · Encumbrance Certificates and previous loan clearances · RERA registration and approved building plans · Environmental, fire, and occupancy certificates from local authorities · Tax receipts and payment records for property dues These documents collectively confirm the legal, structural, and fiscal soundness of a property, ensuring that every acquisition stands on solid ground. Laying the groundwork for identifying and mitigating key investment risks.

    Risks Mitigated Through Diligence

    Comprehensive due diligence safeguards investors from avoidable losses and reputational risk. It helps prevent: · Title disputes or overlapping ownerships can halt possession · Unapproved construction or missing permissions leading to fines or demolition orders · Undisclosed encumbrances or unpaid dues that transfer liabilities to the buyer · Regulatory or environmental non-compliance that jeopardises occupancy and resale Identifying such gaps early allows investors to renegotiate terms, safeguard capital, and make informed, risk-adjusted decisions. As family offices and institutional funds expand their presence in Indian real estate, due diligence has evolved from a legal step into a strategic standard. It converts uncertainty into confidence and transforms a purchase into a secure, strategic investment. At SQUAREA, every transaction is guided by rigorous due diligence across legal, regulatory, and technical layers. Our curated assets undergo comprehensive verification to ensure that each investment aligns with your portfolio’s goals and long-term vision. For bespoke, verified opportunities across India’s finest developments, reach us at hello@squarea.io or call +91 90 9641 9641.
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    Beyond Price Per Sq. Ft:The Key Metrics Every Real Estate Investor Should Know
    For many investors, price per square foot has long been the go-to measure for assessing property value. It’s simple, quantifiable, and allows quick comparison across projects. Yet, in a maturing market like India’s, where returns are influenced by far more than surface pricing, this metric tells only part of the story. Recent data reinforces this shift. According to the National Housing Bank, 45 out of 50 Indian cities recorded an annual increase in property prices in Q1 FY2025-26. Bengaluru saw a rise of 9.1%, followed by Chennai at 7%, Ahmedabad at 6.8%, and Pune at 6%. Such consistent appreciation highlights how investors are now evaluating properties through a broader lens, considering stability, growth, and long-term performance beyond just the price tag. (The Economic Times)

    The Boundaries of Price-Based Valuation

    Price per square foot remains a useful starting point. It helps assess affordability and benchmark projects within the same micro-market. But it does not account for the nuances that define true investment value, such as the location’s growth potential, build quality, developer reputation, or rental yield. Two assets priced similarly can perform very differently over time. To invest intelligently, investors and buyers must look past cost comparisons and focus on long-term fundamentals that drive performance and liquidity.

    Beyond the Numbers: How to Truly Assess a Real Estate Investment

    Smart real estate decisions are rooted in more than numbers. They rely on understanding the balance between asset quality, market resilience, and financial performance. 1.Location and Infrastructure Strength Location continues to be the strongest value driver in Indian real estate. Properties close to metro lines, business districts, or upcoming infrastructure corridors tend to enjoy higher occupancy, appreciation, and resale demand. Pune’s example stands out, its office sector recorded 6.8 million sq. ft. of gross leasing in H1 2025 and is expected to surpass the 10 million sq. ft. mark this year (APN News). Such growth signals sustained corporate confidence and deep investment potential. 2.Developer Reputation and Build Quality A project backed by a credible developer offers far more than just assurance of delivery. Strong design standards, timely execution, and efficient property management translate directly into tenant retention and long-term capital value. For investors, this often means better rental continuity and easier exits. 3.Design Efficiency And Sustainability Factors Efficient layouts, ample natural light, and flexible floor designs enhance usability and tenant appeal. Green-certified buildings with energy-efficient systems and water conservation features reduce costs and increase asset longevity. As ESG priorities rise, such properties command stronger valuations and align better with institutional and HNI investment goals. 4.Rental Yield and Cash Flow Stability Rental income plays a defining role in real estate performance. Residential properties typically generate yields of around 3.5-4%, offering steady but moderate cash flow. Commercial assets, on the other hand, can deliver 8-11%, depending on tenant quality and location (Asset Monk). In a lending environment where home loan rates range from 8.35% to 14.50% (Forbes India), such income-generating assets help investors maintain positive cash flow while naturally hedging against inflation. 5.Market Liquidity and Exit Visibility Liquidity determines how easily an investor can monetise gains. Mature markets such as Bengaluru, Pune, and Hyderabad see steady leasing activity and robust institutional participation, offering smoother resale opportunities. Pune alone recorded 3.3 million sq. ft. of gross leasing in Q2 2025, marking a 13% year-on-year growth (Cushman & Wakefield). This depth ensures not only stable returns but also timely exit options when required. 6.Tax Treatment and Regulatory Compliance Taxation and compliance have a direct impact on overall investment returns. Efficient tax planning through eligible deductions can improve post-tax yield, while understanding capital gains treatment helps optimise long-term outcomes. Clear property titles, RERA registration, and valid occupancy certificates ensure legal security and enhance the asset’s resale potential. 7.Economic and Financing Context Broader economic factors shape real estate performance just as much as asset-level metrics. The Reserve Bank of India has maintained the repo rate at 6.5% for ten consecutive months, ensuring monetary stability. Retail inflation, however, rose to 5.49% in September 2024, highlighting the advantage of owning inflation-hedged, income-producing properties that preserve purchasing power over time. (Forbes India)

    The Smarter Lens: Evaluating Value Over Cost

    Price per square foot might define the entry cost, but it doesn’t determine investment success. The true measure of a property lies in its yield potential, liquidity, and alignment with long-term market trends. By analysing these dimensions together, investors can identify assets that deliver stability and sustained capital growth. At SQUAREA, we help investors move beyond surface pricing and focus on what truly defines performance. Our curated portfolio of premium properties is evaluated across key metrics: yield, liquidity, appreciation, and alignment with market growth, ensuring every acquisition fits seamlessly into your wealth strategy. For tailored investment guidance, reach out at hello@squarea.io or call +91 90 9641 9641.
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