Affordable housing has been given a boost in the budget this year.What does this mean for someone who wants to invest in a budget home now?
The budget did not offer any additional income-tax incentives to home buyers. It provided tax relaxation to lowest income earners, and also more clarity on who the beneficiaries under the Pradhan Mantri Awas Yojana are.
Also, affordable housing has been given the infrastructure status. It means there will be more supply of homes in this category in the future. This does not necessarily make budget housing a good investment bet right now.
I am planning to invest in two properties in Navi Mumbai. With Infotech demand being the known primary driver for housing across India, do you think Navi Mumbai has sufficient demand from this segment to make these investments worthwhile?
The common perception about Mumbai is that though it is India’s financial capital, it has no major Information Technology (IT) presence. Although that is true for the Island City, the Navi Mumbai sub-market more than makes up for Mumbai’s lack of a strong IT footprint.
In fact, IT companies are the largest occupiers in low-cost markets like Navi Mumbai over 70% of commercial space in Navi Mumbai is occupied by IT ITeS players. Moreover, banks’ back offices data processing centres that fall under the BFSI classification prefer Navi Mumbai, and many operate out of IT buildings.
A variety of reasons like this region’s better infrastructure, lower office rentals, connectivity to Mumbai and other areas in Mumbai metropolitan region (MMR) as also a high density of professional and higher education institutes lead to this preference for Navi Mumbai. All this definitely makes residential property investment very attractive in Navi Mumbai.
There are hopes that home-loan rates may come down more. Do you think this will happen?
Cheap loan rates are not the only factor driving home purchasing sentiment. However, it is definitely one of the key factors for a family especially when it comes to buying the first home.
Home loan interest rates become even more relevant for the value or budget home buyer, as every rupee reduction in EMI can propel a purchase decision forward. Banks are flush with funds post demonetisation, and with lowering rates, the consumption-led growth story will continue.