Time ripe for buying home in Telugu States: Experts
Home loan rates at an all-time low right now
Hyderabad: Yes, this season is the best time to buy a property in Telugu States. It is not a prediction by a group of astrologers, but it is a perception of few experts from banking and real estate sectors. Of course, it coincides with Telugu Panchangam as well. Shoonyamasam, which is considered as inauspicious for new beginnings, ends this Saturday.
According to the top bankers in India, the home loan interest rates are at the lowest now, which can only go upwards as there is no possibility of rates coming down further. Currently, home loans are available from 6.5 percent to the home buyers, based on their Cibil score and other eligibility norms of the banks and housing finance companies.
At present, the monthly house rent in major cities in Telangana and Andhra Pradesh is higher than the equated monthly installment (EMI) of a home loan taken for a long term. The first-time home buyers can also avail the benefits of Pradhan Mantri Awas Yojana (PMAY), a government initiative that encourages affordable housing segments.
The final phase of the PMAY will end on March 31, 2022.India's largest public sector bank State Bank of India (SBI) is the nodal agency for this scheme."SBI is the only bank which manages the subsidy in the PMAY scheme. We get the subsidy from the government and credit it into the customer accounts," says Challa Sreenivasulu Setty, MD (Retail and Digital Banking) ofthe bank.
"As home loans are for a long term, people look for lesser interest rates. On a home loan taken now, the rateremains the same for a period of15-20years. So, this is the best time to buy a home in residential markets like Hyderabad," he said, adding that the bank is concentrating on affordable housing segment with an average loan size of Rs 32-33 lakh, which is growing fast.
Y ViswanathaGowd, MD and CEO of LIC Housing Finance Ltd (LICHFL), said: "The home loan rates are at an all time low right now. This is mainly because of the accommodative economic stance of the Reserve Bank of India. As the economy opens up, we may have to see the policy stance which determines the rate trajectory."
"The home loans are long term in nature which can see many rate cycles. A few basis points increase may not substantially have a bearing on the monthly EMIs. Therefore, waiting for rates to drop further may not be advisable. The conditions currently are favourable for home buying," he suggests to those who plan to purchase a property in the immediate term.
Gowd further said, "We have seen some very strong traction in terms of home buying and low rate of interest is certainly a driver. Though low rate of interest has played its part but other factors like stagnant property prices, reverse migration due to the pandemic, need for owning bigger spaces and stability in income have also contributed to the growing demand for homes."
At the end of the third quarter of this financial year, LICHFL registered a growth of 34 per cent in disbursement volume in the individual home loan segment and served around 1.5 lakh customers. The overall disbursals for the nine-month period ended December 2021 stood at Rs42,532 crore. The company expects to close this fiscal year with a good growth.
The members of Confederation of Real Estate Developers' Associations of India (Credai) also consider this season as the perfect time to make home purchase decisions. The cost of construction has gone up drastically, which may force builders to hike the property rates in Telangana and AP.
Credai National Vice President G Ram Reddy said, "It is wiser to buy a house now as the realtors are likely to increase the property rates by around 10-15 per cent in a couple of months due to rising cost of construction materials. I advise the first-time home buyers to mention a clauseon not to escalate the price, while signing the agreement with the builder or developer."
During the last few months, the cost of a cement bag has almost doubled from Rs 250 to Rs 450 and the steel prices surged up 80 per cent from Rs 55,000 per tonne to Rs 90,000 per tonne. The rates of PVC pipes, UPVC windows, paints and other building materials have been rising from March last year. This has put a pressure on the builders to enhance the price range.