Buying a Home During the COVID-19 Pandemic Is More Feasible Than Ever!
The COVID-19 pandemic has pushed millions of people indoors, causing apartment renters to feel the pinch.
With poor access to green spaces and high density within units, Indians are looking at investing in homes of their own. This general home-buying sentiment is also guided by the cheapest home loan interest rates in decades; currently averaging between 6.95% to 7.8%.
As COVID-19 compelled the world to adapt to a ‘New Normal’, one thing’s for sure; owning a home has never been more crucial.
On the one hand, the pandemic has dealt a blow to economies worldwide, but on the other hand, it has opened up new opportunities to make a promising investment. And buying property is one of them!
Individuals have realized the importance of having real estate as an asset in their investment basket as a steady, reliable source of income as compared to the highly volatile stock market that poses its risks.
The raging pandemic has also established the fact that owning an apartment is much easier than dealing with the uncertainties of living in rented accommodation.
In addition to this, the Government of India, financial institutions, developers, and other real estate players have taken multiple steps to ensure that investing in property is more feasible than ever!
To further prove our point, we’ve curated a list of factors explaining why purchasing a home during COVID-19 is an excellent option. Have a look:
1. Lucrative & Discounted Offers by Developers & Real Estate Players
Sales have been critically impacted due to the pandemic.
Developers usually formulate offers during the festive season, but this time around, COVID-19 has pushed them to roll out new offers and attract buyers sitting on the fence.
These players are offering various schemes with waivers of charges such as stamp duty, registration fees, as well as innovative payment schemes.
To overcome issues like inventory pile-up and cost overruns due to the lockdown, several developers have also come up with innovative offers such as refundable booking amounts, cashback schemes and freebies on booking.
For example, with specific schemes, customers can book a property by paying ₹1 lakh and pay the remaining booking amount over the next 100 days. They can even cancel the bookings within 90 days with a full refund guaranteed.
Another scheme offers a cashback offer of 5% of the property cost if it was booked during the lockdown period!
2. Home Loan Interest Rates – Lowest in Decades Source
In March 2020, the Reserve Bank of India (RBI) decided to slash repo rates by 0.75 basis points (bps). This move made home equity loans significantly attractive, presenting homeowners with the opportunity of a lifetime. The steep cut brought interest rates on home loans by public and private sector banks to their lowest in over a decade; between 7.15% to 7.8%. For the icing on the cake, Rivali Park is offering home loan interest rates at 6.95% onwards!
Additionally, property rates are also at their lowest, with many developers offering further enticements via attractive payment schemes and offers. Unlike previous years, home buyers are being offered entirely de-risked, ready-to-move-in-apartments at prices that previously fetched only early-stage properties that were under construction.
The current home loan scenario presents yet another benefit. Borrowers can now seek the possibility of choosing a fixed rate over a floating one. The latter tends to get volatile and can spike, based on monetary policy decisions by the RBI. Hence, opting for fixed rates home loans is the perfect option at this time, when rates are at their lowest.
This also presents an attractive opportunity for buyers looking to invest in property. Individuals can now earn rental income, which is currently pegged at 2.5% of capital value in a metro city, like Mumbai.
3. The SWAMIH Initiative – Undertaken by the Government of India
In July 2020, the Government of India sanctioned funds under the SWAMIH Initiative, enabling the completion of almost 60,000 homes across India.
According to Finance Minister Nirmala Sitharaman, the real estate sector is at the cusp of a turnaround following this initiative, under which Rs. 8,767 crore has been approved for 81 projects.
These projects are extended across an array of markets including large cities such as National Capital Region (NCR), Mumbai Metropolitan Region (MMR), Bengaluru, Chennai, Pune, and also tier 2 locations, including Karnal, Panipat, Lucknow, Surat, Dehradun, Kota, Nagpur, Jaipur, Nashik, Vizag, and Chandigarh.
Amongst these, investments in 18 projects have been given final clearance and disbursement is at various stages across seven residential projects!
Additionally, the fund is actively evaluating options to provide relief to around 15,000 homebuyers in specific long-stalled projects which are pending before the Supreme Court for resolution.
4. Reduction in Stamp Duty
In a bid to boost the real estate market, the government of Maharashtra has decided to temporarily reduce stamp duty on housing units by 3% until December 31, 2020.
In Maharashtra, stamp duty charges are 5% in key cities like Mumbai, Pune, Nagpur, and Nashik and 6% in others.
A reduction of 3% in rate will result in significant savings for home buyers.
Even though this move is temporary, real estate sector experts believe this could boost real estate demand during the festive season, especially in cities like Mumbai and Pune.
All-in-all, irrespective of the hardships caused to various sectors due to COVID-19, the real estate sector is set to bounce back and revive the economy.
With a range of lucrative discounts, offers, and government initiatives on the table, property investments are sure to reach an all-time high.
In Mumbai, Borivali is slowly but surely transforming into a posh residential hub and is ideal for property investments. With several developers shifting their operations there, flats are available at competitive prices, making it a rich and desirable area to invest in.