Overcoming temporary inconvenience, real estate is now getting organised. Before the RERA and GST reform, realty had been largely unorganised. Administrative reforms like demonetisation, RERA and GST have elevated the benchmarks of professionalism. According to experts, fly-by-night developers will cease to exist in the business anymore while reputed builders would dominate. The metaphor 'Buyer is the king' seems to be gaining ground. So, if buying a dream home was on your mind and you were cherishing this dream for long, it's time to translate it into reality.
The cherry on the cake is that home loan rates are considerably low now; 2017 saw lowest home loan interest rates. In the past few months, the buyers' sentiments have essayed a warm sunny skyline after prolonged spells of gloom. Reserve Bank of India largely kept its repo rats unchanged, especially in the last two bimonthly policies. Currently, the repo rate stands at 6 per cent and reverse repo rate stands at 5.75 per cent (repo rate is the rate at which banks borrow from the central bank). Home loans are linked with the Marginal Cost of funds based Lending Rate (MCLR) of banks. August 2017 bi-monthly policy saw the last rate cut of 25 basis points.
The largest public sector bank in India has also reduced its home loan lending rates by 25 basis points for loans up to Rs. 30 lakh to 8.35 per cent. Making things even more ideal for buyers, later one of the biggest housing finance majors followed suit. The domino effect didn't stop there. Another major private bank tweaked its home loan rate structure in sync with the consumers at the bottom of the country's housing pyramid. The narrative heralds a new era for housing in the Indian real estate sector. It is a reflection of burgeoning buyers' confidence in the wake of government reforms witnessed in the recent past. The sops are directly linked to the Centre's focus on affordable housing and rate cuts are meant to encourage primary beneficiaries of the scheme - lower income homebuyers.
Accountability - Though there were laws to protect home-buyers, little could be done in cases like delayed possessions, poor quality of construction and structural changes in the plan. Experts feel that with recent reforms, the legal network is in place and thus, developers are compelled to operate within the framework. Those who can match those standards will continue to prevail.
With RERA, developers will have to make all project disclosures and must deliver what is promised. No random changes in the sanctioned plan are possible. Tax structures are now streamlined under GST. With demonetisation, transactions are expected to be transparent. Thus, the realty sector can make most of the reforms.
Realty Rebound - According to the Global House Price Index for Q2 2017 by Kinght Frank, the growth in mainstream residential prices in India has landed it among the top ten international markets in 2017. The country stood ninth among 55 international markets-13 spots above its position in 2016. The report says that at an annual price appreciation of 10.5 per cent, India's residential sector outshined matured markets such as China (9.6 per cent) and did nearly four times better than the United Kingdom (2.8 per cent).
Real Data Shift - With technology, real estate data is getting more and more refined, thus resulting in a lot of detailed analysis. Thus, we are in a better position to compare markets, new launches and figure out the demand supply ratio. With more and more projects getting registered under RERA, there will be a lot more data - that would be earlier classified or confidential with developers or real estate consultants - on real estate projects available in the public domain, according to a JLL expert.
Current Realty Trends:
1. All realty data is in the public domain
2. Reforms are making the sector professional
3. Artificial Intelligence and technology in use
4. Legal framework in place
5. Reputed players will deliver as promised
6. The sector is enjoying higher transparency
7. India among top ten performing global realty markets
Women employees, especially those pursuing their first job, have a key reason to rejoice. With the promise of a higher take-home pay packet, lower interest rates on home loans for women, affordable stamp duty, and a slew of affordable housing options on offer, there's more power to the young woman on a home-hunt.
The amendment to the Employees' Provident Fund & Miscellaneous Provisions Act, 1952 will allow women employees to take home more. This means, while employers' contribution of 12 per cent will continue, new women employees will not be required to pay 12 per cent of base salary as EPF contribution for three years as this will be borne by the government. The government's Housing for All by 2022 Scheme, which states that women should be either co-owners or sole owner of an affordable house, clearly empowers more women to aim for that dream home more than ever.
Women borrowers are eligible for tax benefits on home loans. Her home loan repayments can reduce her taxable income upto Rs. 3.5 lakh. Eligibility for tax deductions on interest paid on home loans is upto Rs. 2 lakh for women. Maximum tax deduction allowed in the principal and interest repayments is Rs. 1.5 lakh and Rs. 2 lakh respectively.