Grounds for not Receiving PMAY Subsidy on Housing Loan
Pradhan Mantri Awas Yojana or PMAY is a housing subsidy scheme launched by the Prime Minister of India, …Read More
The outbreak of coronavirus or the Covid-19 pandemic has resulted in multiple negative repercussions for most businesses, and real estate is no exception. As individual customers – looking for investments in real estate or simply buying property to have a house of their own – became panic-stricken, the real estate industry saw a sharp dip in sales. Economic activities in India came to a grinding halt since the union government announced a lockdown on March 25, 2020. The lockdown was further extended till June 20 in the face of the rapid rise in the number of infected patients. With the lockdowns being removed in a phased manner, the economy is expected to revive in the long-term.
Effect of lockdown on the real estate sector :
The lockdown, which lasted for 70 days, had multiple adverse impacts on this sector, like sharp decrease in sales and halting of project launches. As the Indian economy dipped, many private companies resorted to cost-cutting measures, like mass layoffs, retrenchment of employees and sharp pay-cuts. So amidst the threat of job insecurity looming large, individuals looking for buying property or making investments in real estate deferred their plans. Another effect of coronavirus on real estate was seen during the lockdown, when construction of housing projects got stalled because of transportation logjams and mass exodus of daily wage workers. However, experts have been predicting a revival of the sector guided by a sense of security.
In the face of an impending crisis for the real estate sector, the union government announced an Alternative Investment Fund (AIF) of Rs 25,000 crore for its revival. To boost demand, and allow individuals to buy property along with making investments in real estate, the government had previously announced tax exemptions up to Rs 3.5 lakh per annum for making home loan interest payments. Alongside, lowering of the interest rate – at the rate of 7% – on home loans was also announced. The RBI’s decision to cut the Repo rates was also taken to boost consumer sentiments on buying.
Signs of revival in the real estate industry :
Though the downtrend continued in the second quarter (April -June), there were strong signs of revival in the third quarter (July-Sep). According to a report titled ‘Real Insight Q3 2020’, a quarterly analysis of India’s eight major residential markets, by PropTiger.com, builders sold more than 35,000 units in the third quarter – an increase of 85% as compared to the second quarter. Net supply graph also increased by 58%.
Why could this be just the right time to buy property ?
Thus, although the coronavirus pandemic has created a crisis-like situation you can stand to benefit by buying property now. If you are looking for purchasing property or making investments in real estate, always remember to choose a trusted and reliable real estate agent. For availing home loans, you can zero in on Hero Housing Finance, which provides easy and hassle-free new home loans for all types of customers.