Why the best time to buy a house is now?

In India, the real estate sector is currently undergoing a paradigm transition. The real estate industry in the country has been somewhat sluggish after the adoption of demonetisation, the Real Estate (Regulation and Development) Act, 2016, and the Goods and Services Tax (GST). Even though these reforms will have a significant impact on the sector, they must first overcome some significant obstacles that will take time. One of the reasons why developers and lenders have lowered their rates is to attract potential homeowners and revitalise the Indian housing market. In fact, there has never been a better moment to buy a home in India from an investment standpoint than now. However, don't take our word for it.

In this article, we will explore some of the top reasons to purchase a house in India in 2022.

Given the low property prices, low rates, and additional benefits available, customers would benefit from purchasing a home during the current fiscal year.

On the back of government efforts, record-low borrowing rates, stamp duty reduction, greater work-from-home mandates, and green shoots of resurrection in consumer demand, India's housing industry is prepared for an upcycle, with demand picking up in the second half of 2021. Housing financiers—both banks and non-bank lenders—have also assisted the positive shift in consumer mood toward property and house ownership by extending additional offers and perks.

Property sales are increasing.

Housing sales in major cities are at an all-time high, with the end-use customer accounting for the majority of the demand. As a result, home inventories fell to a 32-month low in December across the top seven cities. Furthermore, an interesting shift in consumer behaviour has been the sale of houses in metro outskirts – semi-urban demand has risen much faster than metro demand, with less emphasis on office proximity due to the work-from-home culture, and many MNCs, start-ups, and cost-conscious businesses considering a hybrid model in 2022.

According to RBI data, housing finance businesses disbursed loans worth Rs 2.11 lakh crore in April-October 2021, or 14 percent more than the previous year. As of December 2021, home loan growth had surpassed pre-COVID levels across all lenders. In 2022, banks are increasingly interested in gaining a portion of the house lending industry.

The government encourages people to buy houses.

The combination of these variables, combined with the growing likelihood of an interest rate hike by the RBI following the recent spike in inflation data, makes this an excellent moment for would-be homeowners to purchase a new home. In addition, the Pradhan Mantri Awas Yojana (Grameen) subsidies are slated to expire in March 2022. The Union Budget 2022 is also expected to provide the housing market a boost.

It's worth noting that home prices are tightly linked to inflation and interest rates. In December, consumer price index-based inflation rose to a five-month high of 5.6 percent, up 7% year over year and the largest 12-month increase since June 1982. The RBI may be forced to raise policy rates at its next Monetary Policy Committee meeting in February as a result of this increase. Major lenders have begun to account for this possibility, as evidenced by recent increases in some long-term deposit rates.

Home loan rates that are appealing

Existing house loan borrowers can take advantage of the present competitive interest rates offered by banks and home loan firms by switching their loans to lenders who provide the best rates. While there are numerous advantages to moving the balance of a house loan to another lender, it is critical that customers exercise extreme caution and read the tiny print before doing so.

Customers should compare the rates given by different lenders and see if the lower rates are matched by lower monthly payments or a shorter loan term. Before deciding to switch house loans, they should look for any hidden expenditures, pre-closure fees, and their impact on overall monthly instalments.

Make the most of the tax breaks while they last.

Real estate is one of the greatest employers in the country, and in addition to providing direct and indirect jobs, it also contributes significantly to our country's GDP. Recognizing this, the government adopted initiatives to encourage individuals to buy homes in order to boost the sector. In Maharashtra, the stamp duty has been decreased from 5% to 2% until December 2020, and then to 3% until March 2021. Furthermore, until June 30, 2021, the difference between agreement value and circular rate was raised from 10% to 20% (under section 43CA), which is especially helpful for higher-valued residences. In addition, the Maharashtra government has decreased the premiums that developers must pay by 50% till December 2021.

Demand side enablers

The property market was overheated in prior crisis scenarios due to increased valuations, dropping Loan to Value Ratio (LTV), and unfavourable interest rates. However, purchasers with greater LTVs, lower valuations, and lower financing availability are currently in a better position.

Real estate is a reliable investment.

The stock market's volatility and unpredictability have undermined not only wealth, but also investor trust. This has also aided real estate's emergence as a reliable asset class. Because luxury homebuyers often have a bigger stock market investment, the luxury market may be struck first. If factors like employment security and a gradual economic recovery are considered to stay favourable, rental yields are expected to improve with price reduction. It will have a positive impact on increasing buyer confidence.

Renting is still preferable to owning.

When you rent, you're contributing to your landlord's riches. Your monthly payment is determined by rising rents, and you do not benefit from the value of your home. When you own real estate, you're accumulating wealth. Your monthly payment is guaranteed, and you will receive praise. For most Americans, home ownership—and the equity it brings—remains a critical component of wealth accumulation.

It may be tough to save up enough money for a large down payment, but "the cost of purchasing a home right now in some locations is cheaper than the cost of renting," according to Moore. To lock in long-term savings and keep monthly payments low, it's critical to select the correct mortgage rates and terms.

The Feeling of Safety

Paying your monthly EMI on your house loan may appear to be a financial strain, but it is a commitment that is well worth keeping. After all of your hardships and sacrifices, you finally have a place that you can genuinely call home. It is a tangibly valuable asset that will only improve in value with time. In the event that you require cash, you might take out a loan against your property. In fact, no other investment is likely to provide you with the same level of returns as buying a home. As a result, property investment is something you should think about at least once in your life. It will necessitate extensive financial planning. The interest rates are currently low.

Convinced by the reasons above? If you are in search of your dream house get in touch with us today. We will find you the best proeprty in your budget in Pune.
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