Home ownership becomes more lucrative, How to read the fine print in real estate deals

Home buying has become more of a necessity for people in the aftermath of COVID-19 as per several reports. People splashing out now to buy luxury apartments or mid-income groups scrambling to secure an asset for the future, should not be lured by festive offers, deals and discounts offered by top real estate players. That should not be the only criterion for selecting a property and making such a big financial commitment feel experts. While people are looking for how to find real estate off-market and also other best real estate deals, online property platforms have functioned as a real estate deal finder for people amidst the pandemic. 

Some are seeking out distress property deals in Gurgaon and other major metros for snapping up property at lucrative prices while some are reportedly looking at the best places to find real estate deals as well. Searches for real estate deals near me have also gone up sizably over the last few months as per experts. Kanika Gupta Shori, the COO and Founder at Square Yards, Indias foremost proptech platform, has confirmed that sales figures did come down owing to COVID-19 although residential sales have started recovering swiftly as per several reports. She added that for Q3 2020, average housing unit sales figures have come up by a whopping 100% throughout major Indian cities. Delhi-NCR real estate markets have benefited the most followed by Mumbai, Hyderabad, Bangalore and Pune after the lockdown. 

India real estate prices and other trends after lockdown 

There has been a marked increase in Mumbai real estate sales if the MMR (Mumbai Metropolitan Region) is taken into account, majorly due to the cut in stamp duty rates by the Government. The Pune property market is also doing well for this major reason in the aftermath of COVID-19 as per reports. At the same time, while property prices have come down in other major metros, they have actually risen by approximately 3-4% in the Hyderabad real estate and Bangalore real estate markets. 

In MMR, sales have picked up with the stamp duty cut by 2-3 percentage points for a limited time period along with enticing developer discounts. Most builders are now offering festive period payment schemes and special discounts and residential sales figures have gone up considerably in the MMR and Pune from September as a result. Home loan interest rates are comparatively at their lowest levels while buyers also perceive that prices have come down in most metro cities. Taking discounts and offers into account, buyers can now save 10-12% on acquisition cost of properties while prices have come down by roughly 4-5% in the last quarter for Delhi-NCR, Kolkata, Mumbai, Pune, Chennai and Ahmedabad. 

Top real estate deals- What else should you consider before buying? 

Instead of being lured by special discounts and offers only, you should also analyze your own affordability quotient and understand how much you can realistically repay over a long period of time, assessing your current financial position, monthly income, job situation and other factors. You should also take the rental and ownership equation into account. Rentals in major cities are annually between 1.5-2.5% of the value of the property and with home loan rates going down substantially, they still remain more than 7%, creating a sizable gap between rentals paid for a property and its EMIs in case of ownership minus additional costs of real estate ownership.  

Check whether the home loan EMI eats into other future financial goals. Assess whether a major commitment will lead to shelving of other plans, particularly investments made for the future. You should make sure that your monthly EMI goes below 30% of your net monthly take-home income. The location should also be carefully considered. Do not rush into buying property at cheaper rates in an underdeveloped location. Consider distance to major business and economic hubs, transportation and social infrastructure nearby and also the future growth potential. Due diligence is always a must before you plunge into a big financial commitment that will last you a lifetime.