It is a good time to buy a house as the process of searching and finalizing the property takes at least a few months and one can also get the maximum benefit of reduction in home loan rates.
Is this a good time to buy a house? This is a very common question which always remains on the top of the mind of homebuyers. The simple answer to that is, any time is a good time to buy your own house keeping into consideration your ability to buy and the availability of a product of your choice. However, there are various business cycles which have an impact on a buyer’s buying decision.
In the current market scenario, “it is clearly evident that buyers are in a win-win situation post the passage of RERA and reduction of interest rates by various banks. It is a good time for buyers to buy a piece of property as the process of searching and finalizing the property takes at least a few months and one can also get the maximum benefit of reduction in home loan rates,” says Amit Chawla, Associate Director, Valuation & Advisory Services, Colliers International India.
Some of these benefits include:
1. Lower interest rates: Reduction in loan interest rates benefits the end user for sure. If the home loan interest rates go down, it encourages the homebuyers of lower and middle segment to buy a home. Mortgages rates have gone down sharply over the past 18-24 months, thus translating into either lower EMIs, more credit limit or a combination of both to the home buyers. “It also increases the purchasing power of the buyer. New home buyers intending to purchase a property for end use will benefit the most out of home loan rate cuts as the overall cost of property will reduce, thus making a significant difference in the long run,” says Chawla.
2. Interest Rates subsidy: Apart from the interest rates subsidy under the Pradhan Mantri Awas Yojana (PMAY), there are further interest rate discounts being offered by banks for a home loan under Rs 30 lakh. This again increases the affordability level of home buyers and encourages them to avail the benefits of PMAY.
3. Falling Prices: Over the past 2 years, there has been a decline in the sales volume of residential units. As a result, various developers have lowered the asking rates of their projects. Also, the investors who had invested in these projects are not expecting the prices to rise further, and are willing to sell their units at competitive rates in the secondary markets. “It’s a good time for home buyers to bargain hard with the prospective sellers and get a sweeter deal. Also, developers are offering discounts and freebies to dispose of their unsold inventory. However, buyers should conduct a proper search and purchase the property from the branded developers only,” says Chawla.
4. Infrastructure Development: With the development of roads and Metro network, even the long-distance locations are now connected with the Central Business District (CBD) areas. Also, the earlier satellite cities are now turning out to be self-sufficient cities. Thus, projects in these areas have now become more habitable and more attractive to buy.
5. Benefit of Infrastructure Status to Affordable Housing: The government has accorded infrastructure status to affordable housing in the Budget 2017, which would enable developers operating in this segment to raise loans at a cheaper rate, like other infrastructure projects. “The developers, in turn, would be able transfer the benefits of cheaper loans to the first-time home buyers, who can get homes at cheaper rates,” informs Chawla.