Many top Indian cities are attracting NRI (Non-Resident Indian) buyers as prices have hit rock bottom. Indian cities from Mumbai to Bangalore, Kochi to Delhi are queuing up for kudos.
“In the last 40 years that HDFC has been in business, has never seen a better time for the housing sector in India than it is witnessing today. The real estate sector is in a sweet spot as the thrust given to housing has been extremely beneficial not only for developers but also homebuyers and even lenders,” says Renu Sud Karnad, the Managing Director HDFC Limited.
There is a slew of reasons that is spurting this demand. “The uptick in demand is largely based on three factors — the first in that prices have visibly bottomed out,” said Anuj Puri, Chairman of Anarock Property Consultants. “We are not seeing any more major corrections taking place … and properties are a lot more affordable today than in the past.
“The second factor is that there is a generous supply of ready-to-move properties on the market — and unlike in previous years, [their] prices are quite attractive,” he recently told Khaleej Times. The Rera (the Real Estate Regulation Act) has infused greater buyer confidence in the states where it has been implemented in the spirit intended by the Centre. Buyers know that this is an ideal time to buy to make a home purchase decision.”
“NRIs have increased their exposure to residential by around 5 per cent over last year, largely because they have more confidence in such investments,” said Puri. “The rupee value certainly plays a role — but it is NRI end users rather than investors who are now focusing more on the Indian residential story.”
The developers are travelling across the map with great offers. In London, over 25 developers and 30,000 properties are queuing up HDFC fair at Renaissance Hotel in King’s Congress.
The current demand cycle could sustain itself over the next three to four years, which could set off price gains in the four metros of Hyderabad, Mumbai, Ahmedabad and Chennai.
According to estimates up to 172,000 unsold units are likely to be ready this year. These properties are based in eight cities.
“Flagship government schemes like the Pradhan Mantri Awas Yojana (PMAY) and other developments such as granting of infrastructure status to affordable housing, 100% tax exemption on profits for developers building affordable homes, implementation of the Real Estate (Regulation and Development) Act, 2016, or RERA, and the subsidy schemes for first time buyers of residential property are expected to create supply and also help satisfy housing demand and improve urban infrastructure,” says Karnad.
Additionally, if one has availed the loan under the Pradhan Mantri Awas Yojana (PMAY) scheme, then one is eligible for subsidy between Rs 2.30 lakh and Rs 2.67 lakh, which is adjusted against the principal outstanding amount. This could reduce the effective interest rate on the loan to less than 4%, which is phenomenal.
The schemes for EWS and LIG are available up to 31 March 2022 and for MIG up to 31 March 2019. Also, the latest decision to relax the eligibility criteria by increasing the carpet area to 160 sq mt for MIG-I and 200 sq mt for MIG-II reflects the government’s intent to encourage home buyers, especially in smaller towns. “With property prices steady, low interest rates, higher income levels, huge subsidies for first-time buyers, fiscal benefits, expected economic growth, etc, this is perhaps the best time for an end user to buy a house,” she adds