Recently, the coronavirus pandemic disrupted almost every industry. However, people still want to have their own safe havens for various reasons – one being for the sense of home-ownership and security.
But, do you think this is the right time to buy a plot keeping the current situation in mind?
Many industry experts believe that the unstable stock markets have raised the requirements for a steady investment sector that could give better returns. And, what could be a better choice than investing in a property?
Today, residential real estate is at its best; it’s a buyer’s market with low interest rates. Many surveys have revealed that property inquiries have bounced to 50% during pre-COVID-19 in top metro cities, thus making it all the better to buy a plot now.
A survey conducted by Housing.com and the National Real Estate Development Council (NAREDCO), titled ‘Concerned yet positive – The Indian Real Estate Consumer (April – May 2020)’, the results of which will give some relief to the sector. As per the report, real estate (35%) is still seen as the preferred mode of investment, then gold (28%), fixed deposits (22%), and stocks (16%).
Now, let’s see some of the factors that are positively influencing the real-estate market making it the right time to invest in a plot.
Home loans and low-interest rates – The seller’s market has now become the buyer’s market. There has been a significant decrease in home loans interest rates with a benevolent tax regime with tax benefits for both developers and buyers. In the past years, buyers preferred senior living, holiday homes, etc., but today they prefer affordable properties in good locations.
The Reserve Bank of India has cut down the repo rates by looking at the perspective and aspiration of many buyers. A year ago the home loan interest rate was in the range of 8-9%, a 50 lakh loan for 20 years at 8.5% p.a had an EMI of Rs 43,391. But today you might get the same loan at 7% which means the EMI will be reduced by 4626 which is Rs 38,765, which results in a saving of up to Rs 11 lakh on the total payable interest.
Improved support from the Government –The Government has lent its support by announcing fiscal and stimulus packages. Bangalore, Pune and Hyderabad are actually doing better compared to other cities.
Declining loan to value ratio – The need for owning property had spread during COVID-19, the declining Loan to Value ratio (LTV) and unfavorable interest rates is now more favorable for buyers with higher LTVs, lower valuation, and cheaper credit availability.
A stable asset – The real estate market has become a positive asset due to the volatility and instability of the stock market. Aspects like job security and the gradual economic revival are predicted to be favorable, thus giving a positive impact to buyers.
Affordable prices – One of the best reasons to buy a plot in current times is the availability of property at affordable prices. The prices are low and many developers are open to negotiations. Buyers have a better range of options to choose from in good locations and in their budget bandwidths.
The bottom line is: looking at the above-mentioned reasons, it surely seems to be an ideal time to buy a piece of land right away.