Real estate in India is in a unique situation. Smaller developers have plenty of supply, but there is limited inventory from top developers, especially for projects near completion. While there are many predictions about a recession, the reality, especially in Bangalore, is different. The top three developers in the city have very few ready-to-move-in or nearly completed projects. However, this situation can present good deals for serious buyers.
We believe the next few months will be a great time for serious buyers. Here’s why:
1. **Low Real Estate Prices**
For the past few years, it has been a buyer’s market. Competition among developers has kept prices low, sometimes even below inflation rates. Events like demonetization and GST created uncertainty, causing many investors to wait for better deals. Now, there are many offers and schemes for investors.
2. **Bangalore: A City of Opportunities**
Unlike other cities that are financial or IT hubs, Bangalore is both and more. It has a strong presence of non-IT sectors, startups, large e-commerce firms, and aerospace companies. Many companies are looking to expand beyond China, and Bangalore is likely to benefit from this due to its skilled workforce, available land, resources, and investor-friendly environment.
3. **Lowest Ever Home Loan Rates**
Home loan rates are currently around 6.95-7.25%, some of the lowest ever. Since October 1, 2019, the Reserve Bank of India (RBI) has mandated that banks link home loan interest rates to external benchmarks, such as the RBI’s repo rate. This has increased transparency and means banks must adjust their rates every three months based on changes in the benchmark.
4. **Attractive Payment Plans**
Payment plans for real estate are more flexible than ever, even for ready-to-move-in projects. Buyers can choose plans that suit their cash flow with minimal initial commitment, such as:
– Pay 5% now and the balance at possession
– Pay 25% every year
– 12 months of free interest on ready-to-move-in properties
– Pay 5% now, live in the property for a year, and return it if not satisfied
These offers can lead to significant savings for both ready-to-move-in and under-construction projects.
5. **Pro-Buyer Reforms**
The implementation of GST and RERA has strengthened the real estate market. Unreliable developers are leaving the market, and those remaining are more likely to deliver on their promises. RERA ensures project titles are clear and provides protections for buyers. Additionally, the government has increased the home loan interest deduction and reduced GST for under-construction affordable housing to boost demand.
