Some of the best reasons to buy your dream home now are as follows :
- Best Time to Enter:
Almost all the members of CREDAI-MCHI have inventories in the affordable housing segment. Affordability depends on three factors – the house price, income levels and home loan rates. “Prices of residential sector have remained almost flat for the past few years, which helped improve housing affordability, “says Mr. Deepak Goradia, the president of CREDAI-MCHI. Affordability to buy a house has never been as good as it is now. Considering an annualised increment of 7 – 8%, affordability has gone up by that much. Improving job prospects after the pandemic scare has also boosted the affordability. Job creation is on the rise and some sectors like IT are on a hiring spree. Most people who faced pay cuts during pandemic have now seen restoration or hike in their salaries. As a result, the ration between house price and annual income has hit a multi-year low of 3.2 times. The table below shows the minuscule change in the real estate prices in the city of Mumbai in past 5 years :
|City||July-Sep 2016 (INR psqft)||July–Sep 2021 (INR psqft)||Change in %||CAGR in %|
- Incredibly Low Home Loan Rates :
Buying and having one’s own abode is one of the most cherished goals of a human being’s life. The need to move into one’s own home has become all the more crucial in these times. There were numerous cases where people had to leave their rented premises and move to their home town during Covid-19 induced lockdowns. To add to this phenomenon is the boon of lowest ever interest rates in the housing industry, offered by various banks and NBFCs which has made housing much more affordable than it ever was. CREDAI-MCHI President Mr. Deepak Goradia says “People are upgrading to bigger sized apartments because of the requirement of additional space post outbreak of the pandemic and work from home, education from home and entertainment from home have made people realise the need for an additional space at home.” Already opened up job market and even the sentiments of customers are on the rise because of the lower interest rates for housing loan offered by the banking partners. Vaccination comfort has given more confidence to people to move around and physically go and see properties and choose. CREDAI-MCHI expects housing demand to remain strong in the end of 2021 and beyond, especially in the ready to move in properties and in the affordable home segment. The lowest ever interest rates for housing loan has spurred up the demand for homes across the spectrum including premium, mid and affordable segments of housing. CREDAI-MCHI opines that the rate cuts by the banks is a positive initiative for homebuyers and will attract the homebuyers sitting on the fence. Overall, the market is ideal for homebuyers to realise their dreams before the market returns to the old interest rate regime and developers raise prices, which is expected to happen in the coming 3 to 6 months eyeing to soaring prices of construction materials.
- The Dream home shall soon cost more :
Land is a limited resource, while the population keeps growing. Upgrading and increasing urbanisation, growing incomes, increasing prices of building materials, fuel prices etc. Over the years, the developers have tried to absorb the rise in the prices of raw material to ensure the property cost remains reasonable to the end buyer. However, in the long term, if there is no curb to the consistent hike in the prices of raw materials, fuel, labour cost and other factors of production, the cost of the production will increase leaving developers no choice but to pass on the burden to the consumers. In fact, the prices of almost all materials and commodities have shot up as a direct impact of rising fuel prices and this added to the delays in construction due to Covid lockdowns and shortage of labour has led to increased labour cost in construction industry. Many developers have expressed concerns over the 15% average increase in the labour costs over past 6 months. So, due to steep escalation in construction materials and labour rates, CREDAI-MCHI thinks that the developers may not be able to absorb escalating costs and may be forced to pass on the burden onto the home buyers. Considering this and also the fact that real estate is a safer bet than equity in the long term, now is the best time if you are looking to add real estate in your portfolio.
- The Inventory won’t last long:
Due to the pandemic and lower demands in the first phase of Covid-19, real estate market of MMR has a good inventory of ready to move in houses by reputed builders. President of CREDAI-MCHI Mr. Deepak Goradia says “You can truly get your dream home that meets all criteria – location, lifestyle, quality etc. Also, because of delayed construction in the lockdown periods, prices of ready to move in properties are almost at par with under construction homes in many areas. This has never happened before and is unlikely to happen again;” Never ever the home buyers had a wide variety of range to choose from at such attractive pricing, he says. The inventory is selling fast and very soon the market will have limited abodes to offer.
- Avail the tax benefits which has set expiry date:
Real estate generates a lot of employment for the country apart from significant contributions to GDP. Taking this into account, the Government has announced several measures to encourage people to invest in property and buy their own home. Stamp Duty in Maharashtra has been reduced to significant levels. Maharashtra Government have also reduced the premiums to be paid by the developers until December 2021, which is a direct benefit to the end users and property investors. Nevertheless, this is a time bound benefit which should be made use of by all the prospective home buyers, as per the President of CREDAI-MCHI, Mr. Deepak Goradia.