Is it the right time to invest in property in India?
Demonetization raised many eyebrows and many possible paths for the future of Indian real estate. Some real estate market gurus think that property prices will drop and cash flow will become critical in the market. Some people think that the prices will remain stable since the price of the affordable sector has already appeared. The future remains to be seen, but based on current marketing conditions, the following are the reasons why one should invest in real estate in India today.
1. Prices are negotiable
Prime real estate is mostly purchased on mortgage loans, so there would be less of an impact on it, but some things would definitely change. Those builders who do not accept the cash and do not engage in any black money transactions would also be forced to sell their projects at lower prices to keep up with current trading conditions. If they sell at the old prices, they may lose sales to competitors.
2. Transparency is increasing
The Indian real estate sector is moving towards greater transparency. The Real Estate Law is established to regulate the market and all project information and related documents will be digitized. The state has the responsibility to formulate its rules and start implementing them soon. There would be no gaps between the things promised and those delivered. Any land disputes or buyers’ complaints would also be resolved in less time.
3. Simplified taxes
GST is one more coup at the right time. The Indian tax structure is a bit complicated and there are many direct and indirect taxes to be paid by the seller. When the taxes to be paid decrease, the benefit is transferred to the buyer. The cost of building materials would decrease and affordable housing would be available at a lower price.
4. The resale market opens up for salaried buyers
Resale or the secondary market has been for wealthy people who can pay the money up front to buy the property. Unaccounted for cash has been disposed of on the resale market. The buyer can turn the black money into white and the appreciation of the price of the property generates an additional profit. So the scalping market has been at the top of the list for black money holders. Now that cash is disappearing from transactions, wage earners could also snap up second-hand property at much lower prices than primary property. Perhaps the secondary market also offers the option to pay through a loan and buyers get the best deal.
5. Home loans can get easier
Indian banks are making money fast. With the large volume of money deposited by residents, interest rates are supposed to drop and banks will offer mortgage loans on much easier terms. This opens a window of opportunity for middle class buyers who rely on loans to purchase their first home. This is probably a positive boost to the Prime Minister’s vision of ‘Housing for All by 2022’.
The current situation marks the dawn of a new era for the Indian real estate sector. Now is the best time to invest in property in India.