What to consider when buying a house in 2020

Indian real estate witnessed stable growth in 2019 but with the advent of the new year 2020 and the Budget, hopes are high for it to gain rapid momentum to sustain and grow at a good rate. Knight Frank expects the GDP to reach 6-6.5% this year which is a very positive indicator. The RBI had dazzled consumers in 2019 by reducing its lending rate by 135 basis points but the rate transmission by banks was shockingly slow. Considering banks are obliged to play a part in reviving the Indian economy through demand support, they will hopefully bridge this gap in 2020 and buyers will get access to cheaper credit. Home seekers planning to buy their dream home can take that important step this year as one will be spoilt for choices with unlimited housing options, and low interest rates and property value will put the buyer in the driver’s seat.

Even with this excellent climate for buyers, it’s better to be prepared and alert. Listed below are some simple tips that will help you get a good deal when you go shopping for your dream home in 2020:

• First and foremost, answer the What, When, Why & How before buying a house. Is it for investment purposes, renting or personal use? Do you want a standalone house, apartment or a villa in a gated community? Since it’s a huge investment financially, physically and emotionally, buyers should research as much as possible about the builder, location, appreciation rate, resale and rent values etc. to strike a profitable deal. Considering there are nearly 7.75 lac unsold housing units across India’s 9 major markets, now buyers have an upper hand and can have their preferences taken into consideration and given equal importance. If you are buying property for investment purposes, it would be a good idea to go for a city where prices have seen some downward trend in the past, making luxury properties more affordable.

• Check your credit score as home loan eligibility depends upon the repayment capacity, income, existing loans and age of the loan applicant. The maximum loan that can be sanctioned and the eligibility criteria varies from bank to bank in accordance with the RBI regulations. Applying for home loans help in getting tax breaks which is beneficial in the long run.

• Have a thorough understanding of current income, assets and expenditures and accordingly prepare an extensive budget. This will be integral to establishing your new home budget, and it will also help you obtain a great interest rate. Cut out unnecessary expenses and evaluate current income and see if it can be increased over the near term. Stamp duty and registration fees according to state should be accounted for as well. A proper budget will help in analysing how much more money is required to meet monthly expenses and understanding family’s present major financial needs will help in making the right decision. Also consider insuring your property as it safeguards it from physical damage and legal issues which may occur to the property. The cost is relatively low and there are many different home insurance policies to choose from, with varying levels of protection.

• Locations with good resale and rental values should be given preference so that the investment can reap great returns in the future. If you are buying a property for rental returns, then homes in high-rent or highly populated areas are ideal. Research about the rental rate in prospective investment areas which will help you in choosing the right property and location.

As real estate authorities in respective States, through their pro-buyer stance, are trying to  transform the market into a more consumer- centric one, buyer sentiments will hopefully get a boost in the year 2020. This would trigger fresh activity and sales numbers might improve. Buyers who are willing to make a move in this market would certainly reap the benefits of low interest rates and high ready-to-move in and under-construction housing stock.