India, July 22 -- Would you buy a compact apartment today if it meant owning a much larger home a few years later? As redevelopment gathers pace in cities such as Mumbai and Pune, an increasing number of homebuyers are betting on ageing housing societies instead of brand-new projects. The attraction is compelling: buy an older flat at a lower price, receive a larger apartment after redevelopment, and potentially unlock significant value without paying current market prices for a bigger home.

Shirish Tandel (name changed) has a budget of Rs.1 crore, but finding a spacious 2 BHK in his preferred locality in Pune has proved difficult. A 750 sq ft apartment there costs around Rs.1.40 crore, well beyond his budget.

During his search, Tandel ...