Is now the right time to buy a home?
Buying a home is one of the biggest financial decisions we make (if not the biggest). With the property market not performing too well over the past few years coupled with the added disruption of the global pandemic, there is one question on every home seeker’s mind: Is this the right time to buy a home?
Here are the most important factors to consider:
The supply is at its peak
Many luxury projects across the city have either just been completed or are nearing completion. Since sales over the past couple of years have been slow, the supply of new inventory in the market is relatively high. Countless buildings that have now received their occupation certificate and are ready for possession hold a much lower risk than they did before. At the same time, no developer is keen on starting new projects today or in the near future due to the uncertain times we are living through. This means that supply is only going to reduce over time. Luxury buildings such as Trump Tower, Rustomjee Crown, and Raheja Imperia are ready or almost ready with a relatively high supply of inventory. This real estate climate provides homebuyers with the perfect opportunity to buy.
It is a buyer’s market
With a lot of options available directly from the developers as well as in resale, buyers are spoilt for choice in today’s market. However, as the supply reduces over time, these options will follow suit. Right now, there is a high amount of resale inventory in the market that was bought by investors years ago. A large number of these investors are currently looking to sell in distress, presenting buyers with a unique opportunity and negotiable prices. The buyers have the power.
Stamp Duty has temporarily reduced
The government has temporarily reduced the stamp duty charges on properties from 5% to 2% effective now until December 31st and to 3% from January 1st to March 31st 2021. Buying before those deadlines is the only way to capitalise on this reduction in fees. To learn more about this, read our article: Stamp duty from 5% to 2%: here’s what that means for the market.
Interest rates are at a record low
The Reserve Bank of India recently announced they will be rationalising risk weights for sanctioned housing loans (from now until March 2022) and linking them to Loan-to-Value (LTV) ratios. Moreover, the current interest rate is approximately 7%, the lowest it’s been in 15 years. By buying a property today, a homebuyer could lock in a lower rate of interest for the entire duration of the loan. This change demonstrates the national effort going into reviving the real estate sector. Consequently, home loans are cheaper, more accessible, and competitive for the customers.
The effects of COVID-19
The global pandemic has caused colossal amounts of disruption to almost everyone. For some, the dream of owning a home got pushed back several years, while for others, buying a new home is now a necessity. Certain investors are being forced to exit their investment for liquidity, presenting actual buyers with a great opportunity to buy. The one thing that has become increasingly clear as the dust settles, is that the value of a home has increased. This is single-handedly driven by the rapidly rising amount of time we now spend in our houses.
Keeping all these factors in mind, we believe that actual users should keep an eye out and scan the market looking for good opportunities. Don’t forget to read our Tips for safe house hunting during Covid19.
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