Is It Risky to Buy a House or Flat Under Construction?

Buying a home is one of the biggest financial decisions most people make in their lifetime. Because of this, buyers often find themselves torn between two major choices:
Should you buy an under-construction property or a ready-to-move-in home?

Though it is called an “under-construction property,” the actual building work may not have started yet. Once a builder acquires land and obtains construction permits, the project is treated as “under construction.” Ready-to-move (RTM) properties, on the other hand, are those where construction is fully completed, ownership can be transferred immediately, and you can move in right away.

Both these options come with their own advantages and disadvantages. Let’s break them down clearly.

Benefits of Buying an Under-Construction Property

1. Lower Price (10–30% Cheaper)

Under-construction homes are generally much cheaper compared to completed ones. This makes them attractive for buyers looking for budget-friendly options or higher long-term appreciation.

2. Flexible Payment Structure

Payments are usually linked to construction stages, reducing immediate financial pressure. This helps buyers:

• Arrange funds comfortably
• Plan EMIs better
• Apply for loans without rush

3. Customization Opportunities

You often get the freedom to select layouts, interiors, finishes, and other design elements. This personal touch is not possible in most ready-to-move homes.

4. Potential for Higher Returns

Once construction is complete, property value typically increases. This makes under-construction homes appealing to long-term investors.

5. Minimal Documentation

Since you become the original owner, the documentation process is simpler compared to reselling or secondary market purchases.

Risks and Disadvantages of Under-Construction Properties

1. Possibility of Delayed Possession

Construction delays are common. This can cause:

• Extra rental expenses
• EMI burden
• Loss of tax benefits

Solution: Choose reputed and financially stable builders with a strong track record.

2. Changes in Promised Specifications

Buyers may find differences between the promised layout/facilities and the finished product.

3. Legal or Regulatory Delays

If approvals, environmental clearances, or building permits are missing or disputed, the project can get stalled or refunds may get delayed.

Always verify:

• Approved building plan
• RERA registration
• Environmental clearances
• Title documents

4. Increased Costs During Construction

Unexpected charges may arise, such as:

• Development fees
• Charges for additional amenities
• Increase in material costs
• Modification expenses

This may cause the final budget to exceed expectations.

Advantages of Buying a Ready-to-Move-In House

1. Immediate Availability

No waiting period. Once payment is made, you can move in immediately – and stop paying rent.

2. What You See Is What You Get

You can inspect the finished home, evaluate:

• Layout
• Space
• Ventilation
• Quality of construction
• Amenities

There is no uncertainty about what the final house will look like.

3. Easier Home Loan Approval

Banks generally prefer completed projects, making loan approval smoother and faster.

4. No GST on Completed Houses

If the property has an Occupancy Certificate (OC), there is 0% GST, which reduces overall cost.

Disadvantages of Ready-to-Move-In Properties

1. Higher Cost

Completed homes cost around 10–30% more than under-construction ones.

2. Limited Customization

Flooring, layout, and interior design usually cannot be modified without extra expenses.

3. No Visibility of Construction Quality

Since construction is already finished, buyers cannot verify:

• Material quality
• Structural strength
• Workmanship

4. May Not Be Newly Built

Depending on the age of the property, repairs and maintenance costs may be higher.