Are More People Interested In Buying A House Than A Decade Ago
Real estate has always been an attractive investment for millennials. There is an emerging trend of real estate investments post-pandemic due to falling home loan interest rates, affordable prices, and more demand. All these create a perfect match for the homebuyers, and there are no reasons to put off buying a house now. This is especially true when comparing the current scenario to a decade ago. Let’s see what really changed within a decade!
Now vs. A Decade Ago
Many things have changed within a decade and so have people’s preferences. Now people are more inclined towards buying a house due to the following reasons:
Lower Home Loan Interest Rates
Home loan interest rates have taken a dip, making home loans affordable like never before. Now, home loans can be taken at an interest rate starting at just 6.70% per annum.
Affordable Costs
Real estate prices have always shown an increasing trend. However, due to the COVID-19 havoc, demand fell drastically, and due to non-continuity of operations and laborers going back to their hometowns due to lockdowns, prices of houses declined. Therefore, houses can be bought at affordable prices.
Higher Demand
After COVID-19 lockdowns and restrictions were lifted, demand for housing has increased. People have realized that it’s important to have their own house as a sense of security and comfort. Many people who stayed in rented homes faced a hard time during the lockdowns. Therefore, people are more inclined towards purchasing their own house, which has led to a surge in demand.
Government Support
The central government and state governments are launching various schemes and providing incentives in order to encourage people to have their own house. For instance, Pradhan Mantri Awas Yojana (PMAY) offers affordable houses for the Economically Weaker Section (EWS) and Low-Income Group (LIG) category of people. Home loan subsidy is yet another step to reduce the cost for homebuyers. All these steps have increased the demand for housing among the people.
How do home loans encourage housing?
Home loans reduce the cost burden for home buyers by providing affordable loans. Home loans encompass the following features making them a convenient tool for buying your house:
Affordable interest rate
As discussed earlier, home loan interest rates start at just 6.70% per annum, making it one of the cheapest financing tools available.
Lower costs
Home loans are secured loans. Therefore, costs associated with home loans are lesser and involve fewer formalities than other loans.
Easy eligibility criteria
Home loans have easy to fulfill eligibility criteria. The requirements are:
- Age: The age of the applicant should be between 24-65 years of age.
- Occupation: The applicant can either be a salaried or self-employed individual.
- Experience: Salaried individuals should have work experience of at least two years, while self-employed individuals should have work experience of at least three years.
- CIBIL: CIBIL score is an important criterion for any loan application as it depicts the applicant’s creditworthiness and past credit performance. A CIBIL score above 750 is paramount for approving a loan application.
Tax Benefits
Home loans also offer tax benefits to the applicant. Both the principal repayment and interest on home loans are eligible for deduction under different Sections of the Income Tax Act, 1961.
In a Nutshell
If we compare the current situation with the earlier decade, there is a notable increase in the demand for homes. According to news reports, demand for housing has increased among the Indian millennials compared to pre-pandemic levels, with mortgage rates at multi-decade low levels.
If you are planning a house for yourself, take a step in the right direction. For financial planning purposes, you can use a home loan EMI calculator to find out the exact amount of EMI you will need to pay. Apply now and work the current situation to your advantage.
