Should you buy a new or a resale flat?

New Delhi: Should you buy a new flat or opt for one on the resale market? There appears to be no easy answer to this question. People buy resale flats instead of new ones for various reasons.Sometimes, a certain location just does not offer suitable options on the primary market. At other times, buyers do not do enough research and are unaware of the availability of very good options on the primary market. They succumb to the pressure tactics of a persistent real estate broker and buy a resale flat when a new one was available in an excellent location, and within their financial reach. Or they believe that a serviceable flat available at a slightly lower price is always a good bargain.Most often, people buy resale flats because they are in a hurry and want immediate possession. This makes them unwilling to opt for a flat in a project which is under construction, even if completion and possession are only a few months in the future.Because real estate is an eminently re-sellable asset, many people put perfectly acceptable flats on the market after a few years of use because they want to upgrade. This fact makes the market for resale flats almost as big as the primary market. However, this does not mean that resale flats and new apartments fall in the same value chain.Assuming that a buyer is aware of all new projects as well as resale options in a given location and within a certain bduget, it is important to understand the benefits of opting for the former:A home, both as an asset and a possession, is very much like a car - neither offers the same efficiency or overall experience when it is second-hand. The feel of a used car or home cannot match those of a brand-new version, simply because it has already passed through the hands of one or more owners. While this is certainly something of an intangible psychological factor, it is nevertheless very real.Assuming that one has bought it from a reputable developer, a new flat has better, newer fixtures and fittings that come with a minimum guarantee of problem-free performance. Nor is wear and tear the only problem with older fixtures, fittings and appliances - like in the case of most other products, there is also a question of product generation. To illustrate - a first-generation iPhone cannot perform with the same speed, efficiency and reliability as the latest model. Plumbing, bathroom fittings, electronic appliances and other fixtures in a home are by no means immune to the universal laws of product obsoletion. Flats in new projects by good developers tend to be more energy efficient, environmentally compliant, user-friendly and space optimized. Reputable developers are like doctors - they are constantly upgrading their knowledge, techniques and equipment. They do this to remain relevant and competitive in a market which they know to be replete with other options for buyers. The benefits of this orientation are directly passed on to the buyers.It is very difficult - if not impossible - to paint a unique masterpiece on a used canvas. Previous owners of a resale flat always leave a certain indelible part of their personality or culture imprinted on the property. While it is possible to fill in and paint over nail holes in unwanted parts of the wall, undoing serious structural modifications is a challenge. New flats in under-construction and sometimes even ready-to-move-in projects can, in fact, be cheaper than resale flats. In the case of under-construction projects, the sale value of individual units rises only in tandem with the stages of completion. But resale flats often cost as much as (if not more than) new apartments simply because the current owner's cost of original acquisition was higher. This is often a function of obsolete construction methods, which are costlier and more wasteful than those being used now.By buying a flat in an under-construction project, one seals in the price at an advantageously lower rate. By the time the project is complete, one has a brand-new flat which the developer would now sell at a higher cost due to the fact that it is ready to move in. Moreover, the property prices of the location itself will have appreciated - even over a period of five to six months. - New flats have higher resale value and also longer shelf-life on the resale market because of the lower age of the building, which has additionally been built with more current construction technology. Home purchase is never a decision one should make in a hurry. Also, regardless of whether a new flat is slightly cheaper or marginally costlier than a resale apartment, it should not be made solely on the consideration of budget. Few investment decisions have as many long-term financial implications and appreciation potential as property purchase. It is therefore important to understand the pros and cons of old versus new flats, and to always take an informed call when it comes to buying a home.Kishor Pate is the CMD of Amit Enterprises Housing Ltd.