When you
think about buying real estate, the very first thing that probably comes to
mind is your home. Property is playing as a hedge against the stock market.
However, while the real estate has become a popular investment vehicle over the
last 50 years, buying and owning brick and mortar is a lot more complicated thing
than investing in equities and bonds. In this blog, we'll give you the reasons
to invest in
property.
Buying real
estate is widely considered as a safe bet by your Indian investors. Like every
other market, real estate market too has its highs and lows. For cite, between
1988 and 1994 the real estate market had boomed, and the prices for most of the
properties went up by over 10 times during this period.
The market
has witnessed a huge amount of decline in the number of people buying
residential properties. The most important reasons for this is the fact that
property prices remain high as compared to the average income of individuals.
There is end
user interest, but what our buyers are waiting for is reasonable and affordable
prices
Now, the
government has announced two new subsidy slabs to stimulus our real estate
market.
·
The slabs now
can apply to loans with a tenure of up to 20 years, and that too the limit of
15 years.
·
Income bracket of homebuyer will now decide their subsidy at different rates
Income bracket of homebuyer will now decide their subsidy at different rates
If you earning up to Rs 18 lakh per annum, buying your first house will cost nearly Rs 2.4 lakh less as the government will contribute a part of your home loan interest. At present, this contribution is available to only those earning up to Rs 6 lakh per annum.
The government has declared two new subsidy slabs to induce the real estate market and achieve housing for all by 2022. The slabs will apply to loans with a tenure of up to 20 years, as against the limit of 15 years now.
On December 31, 2016, PM of India Narendra Modi had announced two subsidy schemesunder Prime Minister Awas Yojana (PMAY).
Now, Home buyers will get their subsidy at different rates depending on their income bracket in which they are in. People who are earning less than Rs 6 lakh per annum will get a subsidy of 6.5 percentage points on a principal component of Rs 6 lakh, regardless of their total loan amount. If they have borrowed money at 9% interest, they will pay only 2.5% interest on Rs 6 lakh, and 9% on the remaining amount.
In the next bracket, people who are earning up to Rs 12 lakh per annum will enjoy the interest subsidy of 4 percentage points on a principal component of Rs 9 lakh, and the most high income category of Rs 18 lakh per annum will enjoy a subsidy of 3 percentage points on a principal component of Rs 12 lakh.
The net benefit for all the three categories over 20-year loan tenure is roughly Rs 2.4 lakh, and the monthly installment is decreased by roughly Rs 2,200. This subsidy benefit under PMAY is in addition to the income tax benefits on home loans, which can go up to Rs 61,800 per annum for someone in the 30% tax bracket.
Under the scheme for the low-income group people, the government had subsidized around 18,000 first time homebuyers, at a cost of around Rs 310 crore. A senior NHB official has also said that the disbursal rate is likely to go up as the middle-income category has been brought under the scheme.
The right approach in the current market environment is to invest in home property projects by reputed developers like Unique Group in Pune, in growing locations. These developers will surely deliver on the promised quality as well as possession timelines
With several big infrastructure projects like the Goodwill Nirmiti and Aeropolis here gives you the opportunity to make yourself lucky enough so that you can enjoy the decisions of government.
For those who wanted to buy homes but were sitting on the fence because of the high rate on loan interest amount or the one who are hoping for further rate cuts, this might be the right time to take the plunge.
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