Post the pandemic, people have started valuing a home of their own more than ever. They are now more particular about the choices they make on the home buying front, and various other factors are only supporting their idea of buying a home in the year 2022.
The need for owning a home regained importance in the year 2021 and it is set to rise for Indian families in the new year. Various governmental schemes and policies are acting as a catalyst to people’s desire to buy a home of their own. Lower rate of interest on home loans, fall in prices of residential units, and state governments’ stimulus – all have contributed to the real estate market’s revival and will continue to do so in the year 2022.
Let’s see what are the factors that make buying a home in 2022 a good idea.
Property Prices
Since year 2014, property prices have seen a rise of 1-2 percent (compounded annually), way less than the 6.18 per cent increase in inflation, and increase in gross national income which hovered around 6.6 per cent. Property prices have not seen much of an upward change whereas the average yearly income growth has been between 8-10 percent.
These conducive factors along with realisation of the value of one’s own home amidst pandemic and keeping in mind the affordability, more and more people will be seen buying homes in the year 2022 and you should too.
Home Loan Rates
Affordability is one major factor that has propelled the home buying sentiment. On top of that, average home loan rates have decreased from almost 9 percent in 2019 to less than 7 per cent now. Potential homebuyers falling in lower income groups can also now buy their own homes using low home loan rate schemes.
Home loan rates in some banks right now are as low as 6.50 per cent. At this rate, a person can either get an additional loan or pay way less EMI than what it would have been before home loan rates were slashed.
Registration costs
In order to boost the real estate sector and to get the money circulating in the market smoothly during the pandemic, the state governments across the country has slashed down property registration costs significantly. As demand increases and the home buying sentiment improves, property cost may well increase to their pre-pandemic times. Before it happens, one should go ahead and sign above the dotted line.
Registration cost to be based on Carpet area
There were certain regulatory decisions towards the end of the year that clearly showed the intent of the authorities towards improving buyer sentiments. One such key announcement was made by the Noida Authority in December 2021. It mandated that the registry of residential units be done on the basis of the carpet area and not the built-up or super built-up area.
This means that the homebuyers would have to shell out far less money for the registry of their housing units. Other states are expected to follow suit. This will further give a push to the residential sector, making year 2022 the right time to invest in a property.
Lucrative payment options and offers from builders
A lot of developers and builders have unsold properties lying in their kitty. Plus, many of them are aiming at money circulation. Both these factors have led them to rethink their offerings for the end buyers. They are offering lucrative pricing and flexible payment plans in order to boost sales. As the demand increases, these offers might vanish as the developers will go back to their original payment plan offerings. This makes it the right time for indecisive and first-time homebuyers to invest in a home of their own.
Rent Vs buy analysis
The rent vs buy conundrum has always been a mystery for every prospective homebuyer. Covid has sort of put an end to that confusion by rendering home ownership important than ever before. While it all depends on the availability of ready finances, the answer in the current scenario is you should buy a property. Affordable housing scheme by the government has been extended, home loan rates are at an all-time low, housing affordability has got an all-new definition, and property prices will only move north as the world opens up. Right now, you can secure a home at an unbelievable deal, especially if you have some sort of ready finance available.
The best time to buy real estate is always Now!
As businesses gradually go back to normalcy adopting the ‘new normal’ developers are expected to counter the losses suffered in the last one year by increasing residential prices. While the market still has some offers and discounts thanks to the festive and new year season, these might not last for long. With heightened labour costs post the pandemic and the looming fear of a lockdown always on their minds, input costs for the developers have seen an upward trajectory. This in turn is expected to push up residential prices by 10-15 percent in the coming months, as per latest industry reports.
It is a Buyer’s market
There was a time when residential real estate dynamics were driven by investors. However, times have changed, and speculations are not as rampant in the market today. This has led to the market becoming more buyer friendly over the years. This trend has only strengthened amidst the pandemic. The real estate market is currently being dominated by the buyers. The negotiating power lies with the buyers as sellers try hard to get rid of piled up inventory.
