The cities real estate market has got a boost as the demand for fresh housing units is rising. The RBI has reduced the repo rate to 4%, making borrowing cheaper for home buyers. Consequently, home loan interest rates are already as low as 6.95%. This would act as a booster for buyers to invest in property at a cost advantage.
CORRECTION IN STAMP DUTY
To further boost buyer sentiment and reduce the overall cost of purchase for buyers, some states have also announced reductions in stamp duty—the tax that buyers have to pay to the state government as the percentage of the transaction value—in the aftermath of the Coronavirus pandemic. For example, Maharashtra has announced a temporary reduction in rates for six months. Buyers in that state, which is home to the most expensive property market in India (Mumbai), can currently register a property by paying 2% of the property value as stamp duty. Karnataka has also reduced the stamp duty to 3% on properties worth up to Rs 30 lakhs. On September 7, 2020, the Madhya Pradesh government also announced a reduction in the cess on stamp duty charged for registration of properties by 2%.
what should an investor do?
Housing prices in some of the megacities of India have witnessed significant correction. While expecting appreciation soon would not be a wise idea, this present scenario does provide investors with an opportunity to put their money in residential real estate at a low price point. Since prices are unlikely to undergo any further correction, this could prove to be an ideal opportunity for buyers, if they can arrange the funds. Since home loan interest rates are also at record low levels currently, housing finance is also available to buyers and investors at comparatively affordable prices.
Is this the right time to buy if the buyer has funds
This is the right time to purchase the property because the factor enables the buyers to buy at a bargained price, lower rate of interest rates on the home loan, reduced repo rates, cash flow of builder during the lockdown, reduction of the stamp duty in some states.