Current Real Estate Scenario in India – A positive Impact on Home Loan Borrowingby Anoop Bansal Chartered Accountant
Over the next decade, the real estate in India is expected to grow up to 30%. It has been experiencing tremendous growth in recent years. Such mammoth is the development that the real estate industry provides the second largest employer after agriculture. There are several factors that have contributed immensely to the growth of the real estate sector. One of them being the government initiatives and others being the real estate developers and the financial institutions. The government is working towards building homes so as to meet the increasing demands from the populace. India is expected to be the most populated country by 2022. “Housing for All” is set for 2022, and this indicates that the government is taking considerable steps.
What are the major steps taken by the government?
The Central Government has introduced radical transformation in the industry of real estate. One after the other, these reforms were introduced to solve the troubles and make the complicated process easier. One of the major reasons behind taking these steps were to bring the money out from the grey economy and also to create maximum homes. Here are a few reforms that were introduced by the government:
- Real Estate Regulatory Bill (RERA)
- FDI relaxations
- Benami Transactions (Prohibition) Amendment Act
- Change in Accounting Standards (IFRS)
All of these were introduced one by one to clear the deceptive practices going on in the real estate sector. Not only were these reforms introduced but at the same time, various schemes such as Pradhan Mantri Awas Yojana (PMAY) had been introduced as well. Under PMAY, people from the weaker section of the society are entitled to receive a lower rate of interest while borrowing a Home Loan. Already, the Home Loan interest rates have been brought down considerably. This has had a positive impact on the real estate sector.
The synergy between the institutions – Increasing Home Loans:
The real estate developers realize the potential that the Indian real estate market has to offer. They have combined with financial institutions and adhering to the guidelines; they are coming up with some affordable housing projects to increase dwelling incredibly. Reserve Bank of India (RBI) has instructed the financial institution to bring the Home Loan rate down, and this has had a positive impact on borrowing of Home Loan. Various well-known developers have tied up with financial institutions to provide housing at an even lesser rate of interest. Schemes are being introduced not just by the central government but by developers and financial institution as well which has led to an increased interest in Home Loan borrowing.
Eliminating the deceptive practices:
The changes introduced by the government will see off the deceptive measures being brought to the ground. Only known names who are trustworthy will continue to operate through this storm. This will help to make the economy stronger. Fraudulent developers will be left with no choice except to close their business.
Increased interest leading to Home Loan borrowing:
Among the most in-demand cities in India are Bangalore, Pune, Chennai, Ahmedabad, Goa, Delhi and Dehradun. Bangalore – also known as the Silicon Valley of India has been experiencing a tremendous interest from the NRIs. The housing sector has contributed more than 5% to the GDP. And this is to grow even further as the rate of interest will turn more beneficial for the Home Loan borrowers. Even if you are deciding to get a Home Loan to buy a second house, there are ample of benefits being provided by the financial institutions. A Home Loan should be chosen only after essential planning on Home Loan EMI Calculator, an online tool available to calculate the EMI amount.
To conclude, the reforms that have been introduced have brought about a positive impact on the real estate market. This year is going to be a fruitful one, and interest rates will further come down. These will be accompanied by banks’ lower cost funds and surplus liquidity. So, if you are interested in buying a house through a Home Loan, this is the most beneficial time to do so.
Created on Mar 15th 2019 05:49. Viewed 332 times.
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