With property rates plummeting, home loan rates hovering in single-digit zone, salary hikes of 8-10 per cent and festive season round the corner, do you really need a financial expert or an astrologer to tell you it is the best time to buy your dream home?
The scenario is perfect to take a call if have been planning to buy a residential property.
You need not even wait for festive season to begin as you can bargain right for all the freebies and discounts. As huge unsold inventory is staring at the face of developers, banks and builders concede that there is enough scope for prices to go down further.
Here is why 2020 is the best time to own a home:
Realty check: In correction mode
As compared to 2008, there has already been a correction of nearly 30 per cent in real estate prices. Huge inventory remains unsold and further drop in prices is quite imminent. Developers require money and are ready to offer discounts and lowest possible prices to buyers.
Recently, even the Governor of Reserve Bank of India Raghuram Rajan asked the developers to bring down real estate prices to boost demand.
He said that if developers bring down prices, more people would come forward to buy property. Rajan suggested that banks should also make home loans easier but stressed on the fact that the demand would not go up if property rates remain high.
Read More on Best Home Loans in India
Many developers are already providing discounts, schemes and special offers. During the festive season, an additional discount or fall of 10 per cent is likely.
Though it may be difficult for developers to accept the bitter truth but the fact is that there is a bloodbath in realty sector, especially in smaller cities.
Keeping in view the present scenario, a buyer should not wait further and look for all options. Bargaining holds the key to squeezing the best deal.
Due to high supply and low demand, buyers are in a better position to negotiate on prices. Instead of waiting, buyers should try to seal the best deal and ask for more.
You may look for special discounts such as no EMI for next two-three years. In this the developer pays for some time on behalf of the buyer. Try to look for property from secondary market as buying directly from the developer may cost more.
Low interest rate
As inflation is showing a downward trend, the Reserve Bank of India is facing the pressure to slash interest rates to help banks offer cheaper home loans. If the banks pass on the rate cuts announce by the RBI, the benefit will filter down to the borrowers as well as the real estate sector.
Even now, some lenders are giving loans at a rate as low as 8.50 per cent. The home loan interest rates presently offered by major lenders are as follows:
| एसबीआई होम लोन | 6.70 – 7.70% |
| एचडीएफसी होम लोन | 6.75 – 7.50% |
| आईसीआईसीआई होम लोन | 6.75 – 8.05% |
| एलआईसी होम लोन | 6.70 – 7.30% |
| एक्सिस बैंक होम लोन | 6.70 – 8.40% |
| बैंक ऑफ बड़ौदा होम लोन | 6.65% – 7.85% |
| केनरा बैंक होम लोन | 6.65 – 8.90% |
More earnings & bonus mean more prepayments
Indian companies have offered an average salary hike of 12-15 per cent this year. The hike has been a result of a positive economic sentiment and low inflation. After factoring in inflation, the real salary hike in 2014 stood at nearly 3 per cent but this year, it has been around 5 per cent. Though it is too early to predict hikes for next year, but it is being expected that it will be in the same range.
With higher salary and annual bonus, one may look forward to paying EMIs and making prepayments to reduce loan burden.
