A pat on the back is in order! After all, India’s economy and its citizenry are leaving no stones unturned to come out from the shadow of the lockdown imposed due to the pandemic.
But, there had come a time when businesses came to a halt, stock markets were staring into a potential crash, and the real estate sector was going to hit an all-time low. Thankfully, due to the grit and perseverance of the authorities and individuals, things will come back on track very soon.
While the overall situation still has a long road to recovery, there is a silver lining, especially for people looking to buy their dream home. Given the moderate demand for residential real estate at this point, most lending institutions have dramatically slashed down their home loan rates.
So, if you are wondering when is the right time to buy a house? It is now! And, here’s why.
Interest rates are at an all-time low
Lenders have dramatically reduced their home loan interest rates this year to encourage real estate purchase. Not only that, several lenders are offering moratoriums on repayment to assist borrowers dealing with inevitable income hitches due to the Covid-19 situation. Add to this. The RBI has forced lenders to link their priority sector loan interest rates, which includes housing finance, to an external benchmark rate (EBR). Imposing such a rule makes low-interest rates a policy and not just a temporary happenstance. So, now is the time to use an online home loan EMI calculator, and assess your EMI affordability.
Additional Read: How to Plan a Right Budget for New House this 2020
Affordable residential estate prices
With both residential as well as commercial real estate taking a hit because of the ongoing Covid-19 pandemic, the real estate market has seen a significant drop in prices starting the end of March 2020. Real estate is expected to continue a slow sales trend in 2020, thus making this year the right time to buy a house.
The residential real estate sector of India was anyway a little low on demand for the past couple of years, which works wonders for the buyers. And, the Coronavirus outbreak, has solidified low real estate pricing for several more years to come.
So, to sum up – 2020 is very much the right time to buy a house because the virus outbreak has led to a decline in property rates, an increase in transparency, and strictness in regulatory measures. All of this will not only gift buyers their dream homes but will provide them at an affordable cost.
These prices are prevailing and popularising rapidly in the current market, and they are as low as they can ever get with sellers willing to entertain additional bargain requests. Because of these reasons, various NRIs and international brands are also planning on buying property in India.
Additional Read: Top Places to Buy a New House in 2020
Income tax benefits
If you are still wondering, “should I buy a house right now”, you must know that if you do, you get several tax benefits under the Income Tax Act (ITA). And, it is no secret that these tax benefits save a substantial amount of money annually.
Tax benefits are distributed under various sections. Let us look at them one by one.
Under Section 24, it is stated that a person can claim a maximum deductible amount of Rs. 2 lakhs. If your house has a co-owner, then they can avail of this tax benefit as well.
According to Section 80C, owners of personal as well as let-out properties can claim a maximum amount of Rs. 1.5 lakhs as deduction. But, to be able to avail of this benefit, the taxpayer must not sell their house for 5 years from the date of possession. If sold within 5 years of possession then the deductible amount claimed earlier would be reversed in the year of sale, and this amount will be added to their revenue for the year it was sold. Additionally, the person is also allowed to claim the paid registration fees and stamp duties related to their property under this Section.
Coming to Section 80EE, an individual is eligible to claim a deduction of up to Rs. 50,000 every year until the time of loan repayment. Several borrowers can avail of the benefits in Section 80EE in addition to Section 24 and 80C. Before availing of housing finance and claiming benefits under these Sections, it is recommended to check your home loan eligibility online.
The criteria to avail of extra deduction are-
- A borrower must have taken the home loanbetween 1 April 2016 and 31 March 2017.
- The property must cost less than Rs. 50 lakhs.
- The housing loantaken must not exceed Rs. 35 lakhs.
Under Section 80EEA, borrowers can avail a tax deduction up to Rs. 1.5 lakhs over and above Rs. 2 lakhs under Section 24. This means you can claim tax deductions on a total of Rs. 3.5 lakhs. However, these deductions are only applicable to loans sanctioned between 1 April 2019 to 31 March 2020. Other conditions include:
- Only first-time home-buyers can avail of the tax benefits under Section 80 EEA.
- The property in question must not exceed the stamp duty value by Rs. 45 lakhs.
- The candidate must not own any previous property in their name, even if bought by their parents as a gift.
If you want to avail of housing finance to leverage any of these tax benefits, calculate your EMI affordability before applying with the help of an online home loan EMI calculator.
Additional Read: Benefits of applying home loan in 2020
Rewarding deals make 2020 a buyer’s market
As we read earlier, the unfortunate slump caused in the real estate industry during 2020 has left it struggling with a lack of liquidity. This is what led to the reduction in prices and also created a deluge of lucrative deals to help clear out unsold inventory before it loses market value.
If you ever wondered should I buy a house right now, then understand that this year, buyers can reap major benefits on not just low property prices, but also on payment deals such as-
- Flexible loan repayment schemes
- Flash discounts sales
- Free parking space with the purchase of a home
- Reduced property maintenance charges
But, don’t think that other prospective home-buyers are oblivious to the present mouth-watering residential real estate opportunities. In fact, the current economic environment has created massive advantages, for those home-buyers who were readily using home loan eligibility calculators, but were postponing purchasing a new property due to the uncertainty of job security.
Given the range of discounts and home loan rates, delays anticipated in buying a house are getting eliminated already. After all, developers are willing to offer ease of payment as they are dealing with a financial crunch too.
On top of all this, the festive season brought with it a barrage of festive discounts and offers such as payment of half EMI, rental assurance, further reduction in home loan interest rates, etc.
With buyers wanting to aggressively unveil these benefits and sellers willingly giving it to them, the prices may increase at the beginning of the next year, which is why 2020 is the best time to buy a house. If you are already looking to apply for housing finance, we recommend you check your EMI estimates by using an online home loan calculator.
Additional Read: What are must haves when buying a new home in 2020?
The aftermath of the pandemic
The aftermath of the pandemic has created a scenario where owning a house is better than renting one. Also, people have begun to realise the importance of possessing the viable asset of real estate because it is always an available option for steady returns as compared to volatile stock markets.
Furthermore, when residential real estate opportunities, as discussed in this article, come knocking at your door, you have to grab them before it’s too late. Think about it, when was the last time your home loan eligibility automatically went up as a result of low-interest rates.
But, it will soon be too late to buy homes at such affordable rates. Why? Studies are already showing an upward climb in real estate prices in China, and experts are predicting the same trend for India.
Simply put, if the real estate prices go up, it will happen due to soaring demand. If there is demand, the housing finance interest rates will not hold as low as today. And, once they start surging, you will lose out on the great deals available on home loans in 2020.
Parting Thoughts
We all know how overwhelming buying a new property can be, but it is also a milestone many want to achieve. So, if you want to plan it right, assess your position using a home loan eligibility calculator and understand the entire acquisition process – from scouting to financing you will be able to leverage the tempting deals available on homes and loans this year.
Are you also convinced that the answer to the question, when is the right time to buy a house is 2020? If yes, then turn to one of India’s most credible lending institutions – Tata Capital!
We offer home loans that are suited for all pockets. With us, you can also avail of competitive housing loan interest rates, flexible repayment tenures, speedy processing, and much more. Our experts go all out to understand your financial capabilities and ensure the process is conducted with little paperwork.
So, don’t wait before it’s too late! Avail of low-interest rates on home loan in 2020 with us. Log on to our website or give us a call to know more.
14 June 2024
9 mins read
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