Soham was feeling quite smug recently as the stock market has been having a furious bull run. His portfolio has doubled in about a year and he is very hopeful of the future. Even a modest investment in cryptocurrency has given him unexpectedly good returns.
Soham is a software developer in a top IT company in the city. He is yet to get married, and his personal expenditure is modest. He is regularly investing in the stock market so that one day he will build considerable wealth. He wishes to retire early from his profession and pursue his interest in acting in TV serials.
All this, of course, depends on how Tanima will accept the idea. She works with Soham in the same company. One day, they hope to get married and settle down.
Soham was thinking about these when his phone rang. His friend, Sumit, is on the line. Sumit works in a financial services company and Soham regularly asks for his advice on investment matters.
”Soham, good morning. How is everything?” asked Sumit.
”Going good. We are expecting a substantial increment this year” said Soham.
”That’s awesome. Now you must plan to buy a flat.”
”I will, surely. Otherwise, Tanima will kill me,” declared Soham.
”There is great optimism that the housing sector is going to do really well going forward. There are a variety of reasons for this,” said Sumit. ”There has been a massive change in the ground realities for this sector and investing in properties is a great idea now,” he added.
Sumit must be knowing, thought Soham, after all, he has been in the financial services sector for quite a few years now.
Soon, they immersed themselves into discussing the reasons why the property market is so upbeat now, and what are the most suitable properties Soham must have a look at.
Last 5 Months Showed Huge Growth
It has been all bells and whistles for the property developers, marketing agencies, and sales guys in Kolkata in the 5 months of October 2021-February 2022 period. Our sales department reported an excellent growth trajectory in that period.
Interactions with homebuyers revealed that they are very interested in booking apartments right now to take advantage of various financial benefits.
Early Signs of Humongous Change?
Home-buyers have been quite active in searching for suitable properties, talking to property salespeople, visiting building sites, and confirming bookings. They have realised that it is the right time to purchase properties now and more delay will only take away the immense benefits which are available now.
What is the reason?
Let’s discuss this in detail.
Actually, it was coming along nicely for quite some time.
Covid 19 has reminded homebuyers of the need for living in a spacious, safe apartment preferably in a gated community. While the pandemic was practically over, thanks to a very comprehensive national vaccination programme, homebuyers saw the opportunity.
Homebuyers realised that home prices can slowly go up from here as sales pick up. Moreover, rampant raw material inflation, especially of steel and cement, can push up home prices.
Buying a home at these prices can be a smart move as home prices are expected to go up, offering a good return on investment.
However, this is not the only reason why homebuyers are upbeat on buying homes. There are a few other factors that are also influencing homebuyers.
Which are those?
We will discuss them now.
Home Loan Interest Rate is at the Bottom
The homeÂ loan interest rate has been on a downward trajectory for quite some time. It has now reached a level that is seen as the bottom.
Economic commentators are clearly saying that the interest rate cannot go down any further. In fact, it can inch up from here.
There is a valid reason for saying so.
A monster is seen on the horizon, and whenever this growing monster raises its ugly head, the interest rate is increased by the RBI to control it.
The monster is called inflation.
Inflation is rising because of a variety of factors. One of the major reasons is the easy money policy of central banks because of Covid 19, and resultant raw material price hike.
Sooner rather than later, central banks have to increase interest rates, and major central banks have already indicated that they will do so.
The low-interest regime is likely to end in the not-too-distant future, although interest rate hikes will surely be calibrated.
Stamp Duty & Circle Rate Reduction in West Bengal
The West Bengal government had reduced the circle rate and stamp duty for property registrations. The scheme, initially valid till 30th October 2021 is now extended till 3oth September 2022.
Financial benefits for the home-buyers are quite considerable under the scheme.
Because of this scheme, homebuyers in West Bengal, especially in the Kolkata property market, have shown much higher enthusiasm to purchase properties and register them.
The Economy is Mending Fast
The Indian economy is shrugging off the ravages of the pandemic and on the growth path. We have witnessed an all-time high GST collection in February 2022. Obviously, business transactions are growing and that is why tax collection is growing.
There are widely circulated reports of huge impending job creation in the IT, pharma, and various manufacturing and services sectors. Even the hard-hit sectors like airlines, travel, and hospitality are also returning to normalcy.
This is going to increase the demand for office spaces, more so because work from home is coming to an end.
As there is increased employment generation of well-paid workers, the real estate sector looks at a huge opportunity for huge growth. It is estimated that the momentum of high home-buyers’ interest will continue.
Housing is a basic demand in India.
And it will remain so for a long time to come.
As the Indian economy is investing in the growth of infrastructure, evident in this year’s Union Budget, the economy will start growing fast henceforth.
Housing demand will only increase as economic growth takes up speed.