A vast majority of Indians, particularly the middle class, can be grouped as a rather conservative bunch for one major reason. More often than not, they tend to adjudge certain value to each and every major step in a person’s life. And, their judgement – or lack thereof – of a person depends mostly on how many of these milestones he or she has reached. Of all the things the typical aam aadmi can achieve, owning a house often ranks right on top. While there are several millions who have already achieved this milestone, there are just as many – and probably more – who haven’t. This article is for those people who are still looking for reasons to be persuaded into buying a home. Here’s a list of reasons why they should wake up from their slumber and decide on buying a home.
1. Interest rates are more affordable than ever
If one looks at the housing loan interest rates change over the last few years, they’d realise that home loan rates have actually become a lot more attractive. Most of this could be attributed to progressive policies from the central government and also the efforts of the Reserve Bank of India, which is working in conjunction with almost all banks to make housing affordable to common people. At present, home loans are available at interest rates as low as 8.35 percent per annum, which as it turns out, is among the cheapest in nearly a decade. For people from the low and medium income groups, the government has started the Pradhan Mantri Awas Yojana, wherein it allows people to buy houses at subsidised rates.
2. Banks offering better terms and conditions
Banks have evolved over the last few years and so have their policies. For instance, let’s take the topic of loan prepayment. Earlier, there was no such facility available for customers. However, the changing times and the changing market dynamics has pushed banks to become more consumer centric. These days, most banks offer loans with little to no prepayment penalties, meaning any home loan borrower can repay their loan ahead of time without needing to pay any extra fees for making such payments.
Apart from this, there’s another concept called the Home Loan Balance Transfer offered by lenders to people who are fed up with their old loans. This helps customers to reduce their interests, as well as other loan terms to a more lenient one.
3. Poor real estate industry
The real estate industry as a whole has gone through a torrid time over the last decade or so with buyer sentiments reaching an all-time low. Much of this was spurred by high interest rates and higher property value, despite there being weak demand. This has pushed a vast majority of builders and developers in major cities to reconsider their options, who have taken steps to stop the rut. To begin with, they have been offering cut-price deals to prospective buyers, and have also tagged along with lenders to help reduce any unnecessary delay in the purchasing process.
4. Rent is getting expensive by the day
Rent rates are hitting such egregious margins these days that people can’t stop complaining about it. For instance, a simple 2 BHK flat in a good neighbourhood in Bengaluru would cost anywhere upwards of Rs 25,000 per month. Add to this, the maintenance costs and the rent touches as much as Rs 30,000 per month, and the rate at which the demand for rental properties is growing, expecting these numbers to go down is like running a fool’s errand. On the other hand, for a person willing to pay Rs 30,000 a month just on rent, a few extra thousands for their own home wouldn’t feel very far-fetched. They will even get their own address in the bargain, so it’s a win-win situation for them.
5. Get plenty of tax benefits
The Indian tax department offers plenty of tax benefits on home loans, which every homeowner can take advantage of. To begin with, Section 24 allows homeowners to avail a deduction of up to Rs 2 lakh on interest payments, provided that they reside in the said house. Section 80C of the Income Tax Act offers deduction on principal repayment of up to Rs 1.5 lakhs. Apart from this, there’s a tax break for new homeowners as well, wherein Section 80EE offers deduction of up to Rs 1 lakh.
6. Build your equity
India has one of the fastest-growing economies in the world, with the company’s GDP rising at a seven percent average over the last few years. This makes any investment, particularly the ones in real estate, profitable. Besides, real estate investment in India is known to offer exponential returns in a span of a few years. So purchasing a house would increase your net asset value by a few lakhs or even crores.
7. Take advantage of the festive offers
Earlier, festive season offers were largely limited to consumer electronics, clothing, and other such small value assets. However, lenders and builders have now decided to come up with festive season offers on homes as well. For instance, several builders in the country are offering a variety of deals to attract prospective buyers. There are plenty of buyers who are currently sitting on a large inventory of unsold residential properties. To get rid of these houses, they are offering homes at marginally lower rates, so as to sell more properties. So, timing the investment right will mean that you will get a house at a price lower than the prevailing market value.
To sum it up, the housing market in India has undergone a period of stagnation and low sales, and most of the parties concerned are doing everything they can to improve this very situation. Making an investment right now would mean that you will get a house of your choice on terms easily agreeable to you.
(This post has been contributed by bankbazaar.com)
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