Here’s Why Now Is The Right Time To Buy A Property, To Rent It Out
Real estate has lost some of its popularity to its competitors. If we are told that income levels in India have grown significantly in the past few years, then the statement is correct. However, data available with PropTiger.com show that homes sales in India’s nine major property markets plunged 11 per cent during the April-June quarter, this year, despite a price correction, improved regulatory atmosphere and a change of approach among government agencies. So, if the people who are naturally inclined towards immovable assets to movable ones, are earning better and are not spending it in their favourite asset class, something is clearly wrong.
Nearly 8 lakh unsold inventory
Instances of project delays may anger you and discourage you from investing in an under-construction property. However, there are fully-constructed unsold projects that are a liability for builders, which is a blessing for an investor such as you. Picking a ready-to-move-in unit means a buyer could immediately stop giving rent by settling in and an investor could start generating rent by letting out.
Low home loan rates and flat property prices
Real estate, though the second-biggest job creator in India, has turned into a major pain point for the government, amid the ongoing slowdown in the sector. To deal with the situation, a chain of reformatory actions have been launched. Among those measures is the RBI move to bring down the interest rate at a record level. Banks are currently charging interest between 8-9 per cent from mortgage seekers. Since home loans also earn you tax breaks, buying a property with the help of housing finance is a financially prudent idea, irrespective of whether you are an end-user or investor.
Sluggish activity has also kept prices in check—data shows they have largely remained unchanged in most major Indian cities in the past five years. All things considered, it is cheaper to buy a home now than it was seven years ago.
At the time of the real estate boom, property prices and interest rates were both high. When people acted upon their fear of missing out, they actually ended up buying overvalued realty. Today, if they were to sell the property they bought, they would find it extremely hard to break even.
Renting business garners government’s attention
Till every housing unit in the country currently lying vacant is occupied, it would be practically impossible for the government to meet its highly ambitious ‘Housing for All By 2022’ target. Henced, the government is pushing the renting agenda. Consequently, it is in the advanced stages of making the Model Tenancy Act, a law. Once done, renting would become more lucrative for all parties concerned ─ tenants will not have to make huge deposits and landlords will not have to suffer squatters.