Almost every family in the world has its tales of fabulous real estate opportunities that were missed or ignored by one or other of its members at sometime in the past.
In the Year 1987 at PS Group we sold ats in South Kolkata at the rate of Rs. 325/- per sq.ft which are today worth Rs.10,000/- to Rs.15000/- per sq.ft.
In the Year 1991 the apartments we sold in New Delhi for Rs.6 Lakhs are today worth at least Rs.4 crores.
The ats which were booked by us in 1995 in Tollygunge at Rs.600/- per sq.ft. are today worth at least Rs.8000/- per sq.ft.
But during the last almost ve years the property prices have not increased. In fact the prices of commercial and residential properties in many places have come down.
Considering the economy is now on the upswing, the stock market booming and the entire business community, including the industrial and service sector experiencing an all-round feelgood factor, it is very likely the property prices will start rising soon.
In 1960s, property prices in Bombay were almost at par with that of Kolkata. In 1970s, the property prices in Delhi were less than that of Kolkata. In 1980s, the property prices in Bangalore, Hyderabad were much below than that of Kolkata. Until about a few years back, the property prices in Chennai and Pune were much behind than that of Kolkata. However, the property and apartment prices presently in all these cities have crossed the highest prices of apartment in Kolkata. Kolkata as on today offers much better value for money homes than any of the metropolitan cities and cities mentioned above offering rates of home loans, the soaring prices of apartments and properties across the country were checked. Today a buyer can get much better value for money homes in terms of location, specications, terms of payment, facilities and amenities in any of the upcoming housing complex than what was available a year months back. In spite of the fact that the cost of construction has gone up due to increase in price of steel, cement and all other construction materials, the next six months may see many more projects and apartments being offered to buyers of homes at much more attractive prices, terms of payments and facilities. In our opinion, therefore, the next six months or a year would be best time to purchase an apartment anywhere in the country, including Kolkata, in any of the upcoming housing complex.
The home loan rate of interest has already started coming down and presently is at its lowest levels. As our economy is getting aligned with global economy, the interest rates in India would converge towards global rates of interest which are much below the present rate of interests in India and are hovering below 3-4%. As presently the ination rates are also at its lowest levels, the RBIis likely to reduce the rate of interest further in coming times.
It is therefore, advised that anybody taking home loan should opt for variable rate of interest than xed rate of interest as interest rates are likely to come down in times to come. Even if one considers the present rate of interest on home loan, it is still quite attractive if one takes into account the tax break one enjoys on home loan EMIs. After factoring the tax break, (of 30% one enjoys on home loan) the effective rate of interest on home loan works out to be less than 8% which is very competitive if one considers the ination rates to be 6-8% and an average rise in property prices annually being at least 5-10% when one takes the rise of prices of properties and apartments in India during the last decade or two.
Just by converting the rental payment (which is being provided in every months’ budget) into an EMI payment against home loan, any middle income salaried class family can create a wealth in the form of a home of tremendous market value at the end of the home loan payment tenure (let’s say within 20 years) by opting for home loan and buying one’s desired home. One can ensure to stay in one’s dream home on payment of a xed rate of EMI instead of ever increase rentals which are likely to increase at least at the prevalent rate of ination in times to come and which may be subjected to service tax at some future date. The Municipal tax also in self-occupied homes are much less than a rented home. Therefore, buying one’s own home by taking home loan is the best wealth creating instrument available to a middle class salaried family in India.
Today homes, not only provides a roof over the head of one’s family but a complete nancial security to oneself and one’s family. After taking home loan one can also opt for mortgage insurance to ensure that in an event of an untimely death of the borrower the surviving family members are not burdened with the payment of EMI every month and are not deprived of the roof on their head. One can also use one’s home after retirement for obtaining pension to continue living the same standard of life one is used to by opting for Reverse Mortgage.
This therefore, is the golden chance available to the home buyers after almost three years of hectic rise in property prices due to investment in property by speculators and investors as because right now both the investors and speculators in properties are out of market and a genuine buyer therefore, can get the best value for money deals. In our opinion therefore, the next six months to one year would offer the best opportunities for actual buyers of homes to buy their dream apartment.
