Why Should Renters Think About Buying a Property?
Jun 01, 2017 Home Trading Steps
Owning a home is everyone’s dream. But looking at the sky rocketing prices of the properties, individuals prefer to rent a house for the time being rather than buying one. In Tier I cities, people generally think that renting a house is easier than paying a hefty amount if EMIs for a long period of time.
Despite the state of real estate in India, there are certain reasons, why the home renters should turn into a home owner. We discuss the factors here:
1. Affordable housing:
Prime Minister Modi’s dream of providing housing to all by 2022 has received several supports from the government and the common man as well. The affordable housing segment will have provisions for both the economic weaker section (EWS) and lower income group (LIG), which will help them fulfil the dream of owning a house.
2. Attractive home loan rates:
Since, the demonetization of currency notes of Rs 500 and Rs 1000, the bank vaults are overflowing with money. This has considerably reduced the lending rates which has further reduced the loan rates. The leading banks in India have reduced their lending rates by 90 basis points which have urged other banks to do the same. With reduced home loan rates, the buyers are now more interested in buying a home as it fits the budget now.
The government has also started the home loan subsidy scheme for the buyers who are looking to buy the house under the Pradhan Mantri Awas Yojana (PMAY). The credit link subsidy scheme for the middle income group called as (CLSS for MIG) will be valid for one year and has started from 1st January 2017.
3. Rental yield:
Due to the informal nature of the real estate in India, the rental yield is quite low, closer to two percent. The rental yield is the ratio of the total cost of the property to the yearly rental yield. In some cities like Mumbai, Gurgaon etc, the rental yield is above the average.
According to the real estate experts, it is better to buy the property rather than renting one.
4. New regulations to make it easier:
Buyers hesitate in investing in the property because of the unscrupulous practices of the developers. But now with RERA, coming into force from 1st May 217, there will be stricter rules for the developers to save the buyers interest from getting exploited by the developer. It will ensure more power to the buyers and will hopefully interest potential buyers in buying a property.
5. Stability:
Owning a house give a sense of stability. It then depends on the buyer how they want to alter or renovate the property as per their interest and budget.
Despite the state of real estate in India, there are certain reasons, why the home renters should turn into a home owner. We discuss the factors here:
1. Affordable housing:
Prime Minister Modi’s dream of providing housing to all by 2022 has received several supports from the government and the common man as well. The affordable housing segment will have provisions for both the economic weaker section (EWS) and lower income group (LIG), which will help them fulfil the dream of owning a house.
2. Attractive home loan rates:
Since, the demonetization of currency notes of Rs 500 and Rs 1000, the bank vaults are overflowing with money. This has considerably reduced the lending rates which has further reduced the loan rates. The leading banks in India have reduced their lending rates by 90 basis points which have urged other banks to do the same. With reduced home loan rates, the buyers are now more interested in buying a home as it fits the budget now.
The government has also started the home loan subsidy scheme for the buyers who are looking to buy the house under the Pradhan Mantri Awas Yojana (PMAY). The credit link subsidy scheme for the middle income group called as (CLSS for MIG) will be valid for one year and has started from 1st January 2017.
3. Rental yield:
Due to the informal nature of the real estate in India, the rental yield is quite low, closer to two percent. The rental yield is the ratio of the total cost of the property to the yearly rental yield. In some cities like Mumbai, Gurgaon etc, the rental yield is above the average.
According to the real estate experts, it is better to buy the property rather than renting one.
4. New regulations to make it easier:
Buyers hesitate in investing in the property because of the unscrupulous practices of the developers. But now with RERA, coming into force from 1st May 217, there will be stricter rules for the developers to save the buyers interest from getting exploited by the developer. It will ensure more power to the buyers and will hopefully interest potential buyers in buying a property.
5. Stability:
Owning a house give a sense of stability. It then depends on the buyer how they want to alter or renovate the property as per their interest and budget.
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