Modi government mulls new housing scheme with just 6-7% home loan interest rate

Looking to boost the housing sector, the Modi government is mulling a new scheme that may use money from the demonetisation drive. According to an ET Now report, the government is keen to boost the housing sector via a new scheme and is already in discussion with the RBI. The new housing scheme may be announced as early as the Union Budget 2017, which is expected to be presented on February 1. The channel reported that the final contours of the housing scheme will be decided after the details of revenue earned from demonetisation emerge. The report went on to add that the government is eyeing an interest rate in the range of 6-7% for home loans up to Rs 50 lakh. This new lower interest rate option of 6-7% will be available to first time borrowers and is likely to provide a much needed impetus to the housing market.

The real estate sector has been under pressure for quite some time now, and with the government’s move to demonetise old Rs 500 and Rs 1000 notes, experts expect an initial slump in home sales. However, there are also chances that banks will find room to lower loan rates – a step that would encourage people to buy homes. ‘Housing For All’ is a dream project of the Modi government, and the new scheme that is being talked about appears to be a way to avoid demand for real estate from falling further. The proposed interest rate range of 6-7% for home loans up to Rs 50 lakh also suggests that the government is looking to make housing more affordable for all.

While rating agencies and analysts were skeptical of the impact of demonetisation on the real estate sector, some industry experts had welcomed the move, stating that it would benefit in the long-term. Nirmal Jain, Chairman of India Infoline had said that housing will no longer be a distant dream for people now. “This (demonetisation) is a very powerful measure to curb black money. PM Modi has kept his promise of taking stern measures against black money. It will have deflationary impact in general and more specifically on real estate prices and make homes affordable, and is indirectly a boon to honest tax payers,” he had said.

ref: http://tz.ucweb.com/11_1qqhY

Looking to boost the housing sector, the Modi government is mulling a new scheme that may use money from the demonetisation drive. According to an ET Now report, the government is keen to boost the housing sector via a new scheme and is already in discussion with the RBI. The new housing scheme may be announced as early as the Union Budget 2017, which is expected to be presented on February 1.

The channel reported that the final contours of the housing scheme will be decided after the details of revenue earned from demonetisation emerge. The report went on to add that the government is eyeing an interest rate in the range of 6-7% for home loans up to Rs 50 lakh. This new lower interest rate option of 6-7% will be available to first time borrowers and is likely to provide a much needed impetus to the housing market.

 The real estate sector has been under pressure for quite some time now, and with the government’s move to demonetise old Rs 500 and Rs 1000 notes, experts expect an initial slump in home sales. However, there are also chances that banks will find room to lower loan rates – a step that would encourage people to buy homes. ‘Housing For All’ is a dream project of the Modi government, and the new scheme that is being talked about appears to be a way to avoid demand for real estate from falling further.

The proposed interest rate range of 6-7% for home loans up to Rs 50 lakh also suggests that the government is looking to make housing more affordable for all. While rating agencies and analysts were skeptical of the impact of demonetisation on the real estate sector, some industry experts had welcomed the move, stating that it would benefit in the long-term. Nirmal Jain, Chairman of India Infoline had said that housing will no longer be a distant dream for people now.

“This (demonetisation) is a very powerful measure to curb black money. PM Modi has kept his promise of taking stern measures against black money. It will have deflationary impact in general and more specifically on real estate prices and make homes affordable, and is indirectly a boon to honest tax payers,” he had said. ref: http://tz.ucweb.com/11_1qqhY

Demonetization: 'Housing prices already at lowest, no scope for correction,' says CREDA

Credai said the real estate industry fully and unequivocally supports government's decision of demonetization.

Realtors' body CREDAI said on Saturday there is no further scope for correction in housing prices in the primary market post demonetization as rates are already ruling at the lowest level. Credai, however, said that the real estate industry fully and unequivocally supports the decision of the government to demonetise currency notes of Rs 500 and Rs 1,000 in the national endeavour to eliminate black money, corruption, fake currency and terror financing.

 The association in a statement said that the primary market is funded by banks and financial institutions which are all regulated entities. As such, cash component is not an integral element of the primary market. Therefore, Credai denies adverse impact on the primary real estate market arising out of demonetization. In fact, the primary segment is expected to gain at a rate of 15% YoY, the statement said.

The government's resolve to eliminate black money and corruption is in the interest of the common man as well as business and industry, it said. Real estate industry contributes 7% of country's GDP and is the second biggest employer after agriculture. Given the scale and size of the industry, it is imperative that Credai articulates the impact of demonetization on the industry and brings it to the knowledge of the general public, it said.

 In the aftermath of demonetization move, banks are going to have additional funds upward of Rs 10 trillion. Hence, a fall in interest rates up to 200 basis points is expected. An early sign is seen with country's largest lender State Bank of India cutting its deposit rates by 1.75%. According to Credai, we see home loan rates coming down from the present level of 9.25% to less than 7% in less than one year from now.

This would bring down the EMI for the ultimate consumers. Credai expects the mop up of black money to also lead to higher tax collection and a lower rate of personal and corporate income tax from the next financial year onwards. In other words, the demonetization would put more money into the pocket of home purchasers through lower tax burden and incentives for home ownership.

 The tendency towards lower rate of interest is also going to be strengthened by a low rate of inflation. Credai, comprising 11,500 real estate developers spread over 166 cities in 23 states in the country, is the apex body for private real estate developers in the country.
  http://www.dnaindia.com/money/report-demonetization-housing-prices-already-at-lowest-no-scope-for-correction-says-credai-2277276

Home launches rise 14% in September quarter, sales stable: PropTiger

NEW DELHI: Home launches across the top nine cities registered a 14% rise in the July to September quarter, the highest in last five quarters, says a report by online real estate advisor PropTiger.

The affordable housing segment, with homes priced between Rs 25 lakh to Rs 50 lakh, accounted for about 61% of the total launches in the September quarter (Q2 FY17). As many as 47,000 new residential units were launched in Q2 FY17, against 41,000 units in the preceding quarter. Sales, however, remained stable, with 54,721 units launched in the Q2 FY17, compared with 55,550 units in Q1. However, annual sales increased by 12%, from 48,976 units in Q2 FY16 to 54,721 in Q2 FY17.

Inventory overhang during the quarter remained unchanged at 35 months. However, unsold inventory in all the cities, barring Ahmedabad, Kolkata and Pune, witnessed a decline. “The market seems to be finding its base with sales hovering at around the 55,000-unit range for the past two quarters. The increased focus of developers on execution and new launches mostly happening with prior approvals, are expected to bring fence-sitters into the market," said Anurag Jhanwar, business head, consulting and data insights,

PropTiger.com and Makaan.com. Home prices remained range-bound across the cities, with just Hyderabad registering the highest annual appreciation of 11%.  "Developers have been reluctant to reduce residential prices and have instead been offering deferred and flexible payment schemes to entice buyers," said the report. Old projects launched more than 12 months ago accounted for 60% of the total sales during the September quarter, indicating buyers' inclination towards projects which are showing visible construction progress.

Mumbai, Pune and Bengaluru grabbed the major share of home sales during the quarter of about 58%. Mumbai contributed the most to sales, accounting for 21% of total sales during the quarter, followed by Pune and Bengaluru at 19% and 17%, respectively.

 The PropTiger report covered nine key Indian cities of Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. Home sales are expected to increase in the subsequent quarters on the repo rate cut by the Reserve Bank of India, discounts and schemes offered by developers and the Real Estate (Regulation And Development) Act, according to the report.

 ref: http://realty.economictimes.indiatimes.com/news/residential/home-launches-rise-14-in-september-quarter-sales-stable-proptiger/55048951

Buying a House? 7 Things to Check Before You Seal the Deal

https://housing.com/blog/2015/12/30/buying-a-house-7-things-to-check-before-you-seal-the-deal/?utm_source=housing-existing&utm_medium=email&utm_campaign=buying-a-house-7-things

Buying a House? 7 Things to Check Before You Seal the Deal
Buying that perfect home is not the easiest task. Some wait for the perfect deal to come up while some may even spend a lifetime waiting to build or buy the right home, but it may just never arrive. Undoubtedly, it is one of your biggest financial purchases in your lifetime, so you would want it to go perfectly, be it the first time or the last. When you find yourself unable to save enough for a new house purchase, is when ‘planning’ comes in. Planning your financial aspects is as important as saving. Also, what should you consider before buying a house? Is it the location or the budget? Or is it going to be a choice to be made between a spacious house and a holiday home?  

Here are seven things that you should check before you seal the deal.

I) Budget

One of the most important home buying tips is to decide on a budget. This helps you decide what kind of house you will end up buying. To avoid a wrong financial decision that will turn the experience nightmarish, do a careful study of your finances before you start scouting for a house. Adding up all your income, determine what kind of expenses, investments and additional financial commitments you have. In the case of your spouse, parents or children contributing to the purchase, doing a joint calculation will make the task easy.

 A thorough calculation will give you a rough idea about how much money you can set aside per month for the house purchase. After deciding the full budget, the main objective is to break it up into down-payment and the monthly EMI that you can afford to let go from your income without getting hard-pinched. Once you determine the affordable amount, you can decide on the type and location of the house.

The first payment that you have to make is the down-payment. Banks will finance a maximum of 80-85% of the property cost and you will have to shell out the other 15-20%. But don’t spend every last penny in the down-payment or borrow from other sources. Beware of taking loans from sources like family members, colleagues or your office. Banks don’t include stamp duty and registration charges in the property cost, so the entire amount has to be borne by the buyer alone. Next comes monthly EMIs which may run for over 20 years, in many cases. Plan it keeping in mind your financial commitments (children’s education, medical needs and emergencies, family vacations, etc).

 While deciding the final budget, plan out in such a way that you have some money left (for other uses) after the down-payment is made. Also, make sure your monthly loan payments do not exceed 40-45% of your net income.

  II) Home Loan

 With increasing property prices, when you don’t have much choice but to opt for home loans, look for a bank that’ll give you an easy home loan with the minimum rate of interest. There are many websites (mostly of home loan companies), which have online EMI calculators. You can calculate your monthly EMIs using these easy tools. Use Housing.com’s EMI calculators to get the best customised offers too. Most banks and home loan financial companies have information on their websites stating eligibility and the rate for home loans. The most popular ones are SBI, HDFC, ICICI Bank and Axis Bank among others.

 After you collect information about the lenders, you can do a comparison about which lender offers the most convenient loan. Home loans are determined based on the location of the property, history of the developer and can be obtained for both new and resale property.

When it’s a resale flat, most lenders choose to value the property independently before providing the house loan. This loan is based on their value instead of the cost mentioned in the purchase agreement. Next comes the choice between ‘fixed rate of interest’ or ‘floating’ or a mix of both. Most people tend to get confused regarding this part and end up taking advice from anyone, including the broker. Take help from the bank’s relationship manager, instead, or consult a property expert, as your entire financial burden will depend on it. Also, consider flexibility on the bank’s part to adjust the EMI amount or tenure in the case of an interest rate revision.

III) Location

 After your financial calculations are done, decide on the location of your property. Where exactly do you want your dream home to be? Would you prefer a suburban location or an urban area? Do you want to live in a peaceful isolated community or close to the main hustle-bustle of the city? Can you compromise on a little more time on travelling instead of living in a crowded area?

Before going ahead with the purchase, you should check out its distance from public amenities, hospitals, marketplaces, malls, corporate offices, schools/colleges, police station, etc. Also, ask around about security of the place, especially if you’re a single woman. Is it a crime-prone area or is law and order well-maintained? Home Buying Tips Also, enquire if the place gets affected in the monsoon and if the area comes under the municipal corporation.

Check if a regular water supply is available and if there is a power shortage in the area. Only after checking out these crucial criteria, go ahead with the location. Also, remember that the price of the property depends on the locality and the area. Some banks do not offer loans, in particular to black-listed areas, so beware of them in order not to be cheated.

IV) Type of Home

 Right after you have decided the budget, the amount of the loan required and the location where you want your residential property to be in, the task becomes easier. Next, you have to decide the type of home you want to own.

 This could range from an apartment, villa, flat, duplex, penthouse, row house to a big bungalow. There are many factors which you need to consider before deciding the type of house. Right from the size of your family to your professional needs, the size and type of home depends on many factors. Will your family become bigger any time while you’re in this house? Do you have plans to get a pet? Would you rather have a big kitchen instead of a luxurious bedroom?

V) Insurance

 Insurance is the most forgotten factor through the excitement of buying a property. The overwhelming experience of buying a house may make you forget that everything needs to be protected, including your hard-earned house. “India is one of the most under-insured countries in the world as non-life insurance sector has a penetration of only 0.7 percent in the country,” P. Chidambaram, former Finance Minister, said. Among 200 general insurance products available in the market today, around eight of them offer home insurance products – ICICI Lombard, TATA AIG,

HDFC Ergo, United Insurance, IFFCO TOKIO Home Insurance, The New India Assurance, Bajaj Allianz and The National Insurance Company. Don’t forget to buy any of these after carefully reading the document as you can protect your home from damages caused by calamities, burglary or a fire accident. This will not only insure your home but also keep you protected from losing all your investments during the house purchase.

VI) The Devil is in the Details

 Many get tempted to ignore small details while buying a house, which may not seem to be so crucial initially. Some builders bundle up amenities as a preferred option. They offer security, various facilities such a swimming pool, gym, library, park, coffee house, etc., which constitute society charges! Make sure you also inquire about the annual maintenance charges before you buy a property. In most cases, you have to pay a share of the overall building maintenance.

 Home Buying Tips

Enquire if there is electricity backup in the community or the building as frequent power-cuts are more or less common. You should also check if the lifts in the building work properly and the lighting within the house and in key common areas such as hallways and stairwells have 24/7 power backup.