The year 2020 was a year filled with uncertainty due to COVID-19 which forced many working professionals to loose their jobs and business facing huge financial difficulties. The situation was depressive all over the globe and caused many NRI\'s to return back to their native home in India and many of them are now planning to settle down in their own county , aspiring to buying their own home in India. There is a ray of hope for 2021 in real estate market with enhanced buying activities as the home loan interest rates have touched the historical low as a result RBI revised monitory policies to boost economic growth. RBI reduced he repo rate during the nationwide lockdown by cutting it by 40 basis point (100bps=1 percent) making it all time low at 4% and reverse repo rate at 3.5%. Home loan rates for SBI has touched a low at 6.9%, similarly other public and private banks have also followed the suite. Now home buyers have fewer burdens on the EMI payments.
The encourage home buyers further the PMAY ( pradhan mantry awas yojna ) for new borrowers is providing credit linked subsidy scheme which is providing substantial benefit to middle income group i.e. MIG-1( Income : Rs. 6 lakhs to Rs. 12 lakhs per annum )- interest subsidy of 4% and 3% for income group from Rs.12 lakhs to Rs.18 lakhs categorized under MIG-II.
New borrowers (if eligible) can also apply for subsidy under the Pradhan Mantri Awas Yojana (PMAY) scheme. It is a credit linked subsidy scheme where middle income group - I (MIG -I) with income between Rs 6 lakh and Rs 12 lakh can avail interest subsidy of 4% whereas middle income group - II (MIG -II) with income between Rs 12 lakh and 18 lakh can get interest subsidy of 3% under the scheme.
Among other measures that government has announced in the year 2020 is the income-tax relief to home buyers and developers. The differential for tax relief between the circle rate and market rate has been hiked from 10% to 20% on the sale of units valued above Rs. 2 crore till June 21, 2021. This means homebuyers can buy a house which is 20% less than the circle rate without attracting tax. Due to the pandemic economic downturn property prices have fallen below the circle rates.
Has the time come now in 2021 to take a final decision to buy home? Real state investment is always a good idea but one needs to take the decision considering many factors. Many investors were planning to wait in 2020 and to make their final plunge in the beginning of 2021 and the time has come as with the passing off of the pandemic situation economic activities are coming back to normal and the real estate market is looking forward to an upward trend in demand and thereby prices. So the sentiments of buyers are to take the opportunity before the prices start making recovery.
There are some future factors that can influence your buying decision for a home in 2021.The prime reason is related with the stability in income flow and expected increase in property prices. Experts in real estate business predict that the market is going to improve in the next few years starting 2021and all optimistic buyers would like to invest in buying home at the beginning of the upward curve while recovering from the pandemic and the employment rate increase. So more people will tend to buy in 2021.There are some cities which are hard hit by the pandemic and demand of houses have fallen in this cities and will take some time to recover. It may be worth to invest when market is depressed. However, it is yet to be seen how market picks up its momentum but surely 2021 is a critical year when large number of buyers will come forward to gain from the expected price differential.
KW Group's Anthem.