Over the last few months, several housing finance companies and banks have slashed their home interest rates. It is majorly due to higher liquidity and a lower interest rate in general. There has been a higher demand for houses at the same time as well.
Now that a lot of builders are offering discounts and loans are available at low-interest rates, it might be the best time to cash in. If you have been planning to buy a house, this might be the time to turn that dream into reality.
The rise in Demand:
After the first wave of Covid-19, there was a surge in the demand for houses across the country. The rise in demand was also supported by lower interest rates, discounts from developers, and a reduction in stamp duty by some governments. The demand slowed down again, on the arrival of the second wave. But it now picking up again post that.
Contradictory to what many believe, Covid-19 has been a bigger driver of the rise in demand. As people spend a lot of time at home due to working from home, they realised, to work efficiently they need a larger home or more space. Thus, a lot of people who were happy living in a rented place also decided to purchase a house.
Several industry experts also believe that a lot of potential house buyers are looking for larger houses. As a lot of IT companies believe working from home is going to become the norm, people don’t mind buying a bigger house. Even though that might be a bit far off from their work.
The rise in demand has directly resulted in higher costs for buying a house, across some cities. However, that will not remain the case for a longer duration. As developers are pushing for higher sales to increase cash inflow, the prices might not rise in a jiffy. However, the rise in prices of commodities might trigger a 10-15% rise in the prices of houses.
Should You Buy the Nicest House Now?
For the ones who have been saving for a while now or were planning to buy a house, now might be the best time to do so. There is a shortage of supply in the market and developers are looking to push their sales. Factor in lower interest rates and you can now afford the nicest house you can think of.
For example, if you are eligible for INR 50,000 as EMI for a house, at 8% it works out to be approximately INR 60 lakhs. However, with the lowest interest rate of 6.7% currently, you can take a loan of INR 66 lakhs.
Given the fact that you are more likely to spend a lot of time at home, it makes a lot of sense to go for the nicest home that you can afford. And given the above example, you might be able to stretch your budget a bit more than it was feasible earlier.
