The last two years have been an outlier for the mortgage industry with interest rates hovering at record low levels of sub 7 per cent.
Nalin Jain, Chief Customer Officer and Head of Operations at Godrej Capital, says, “Low property prices and stamp duty reductions coupled with pandemic-led lifestyle changes further scaled the sector’s trajectory. But, given the present macro-economic landscape and inflationary concerns, the upward movement in the interest rates was imminent.”
While this move might dampen the buyer’s sentiments briefly, industry experts say it is still a suitable time for homebuyers to take advantage of low home rates.
Here are some of the reasons for this:
On the home loan front, despite the uptick in interest rates and home prices, “we live in a very low rate of interest environment relative to the pre-pandemic era. While rates may seem high at starting rates hovering around 7 per cent, they have been much higher historically,” says Jain.
Now, applying for a loan can help you buy a home before home financing becomes even more expensive. Note that these days, many housing finance entities offer innovative, flexible repayment options such as EMI customization and longer tenures to enhance affordability.
Jain points out, “The continuous rise in raw material costs has surged property prices from the residential real estate perspective. However, these rates are expected to be reversed once the global supply chain is restored. Many developers may offer discounts to homebuyers to sell their inventory and boost their cash flow to offset the current markup.”
Furthermore, experts say incentives, such as relief in the stamp duty and registration fee, can also be a silver lining for fence-sitting homebuyers. Additionally, Jain says, “improved job prospects, appraised salary structures, and tax benefits on home loans could keep the consumer sentiment buoyed.”
In short, it is opined that a hike in the rate of interest cannot be the sole reason why a homebuyer should not seek home financing. In fact, given the macro-economic trends, a home purchase is highly recommended for those looking at a residential property for a personal dwelling,” adds Jain.
