Why Is Real Estate Still India’s Most Secure Investment?

Secure Investment Landlords, according to John Stuart Mill. “Get rich while sleeping.” Even after two centuries, it appears to be true! Despite short-term hurdles posed by the Coronavirus epidemic and the availability of alternative investment options, Secure Investment India’s real estate sector remains one of the most popular long-term investment vehicles. And most Secure Investment.

 


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Secure Investment : The Coronavirus outbreak was one of the most difficult difficulties the human race has encountered in a long time. The real estate business, like every other sector of the economy, has encountered challenges such as historically low housing demand, few site visits, stalled building operations, and a lack of trust among homebuyers. The real estate industry, on the other hand, is surging and exhibiting signs of recovery after two pandemics.

The realty industry has sparked prospects of recovery for other ancillary industries, thanks to reasons such as the Reserve Bank of India’s (RBI) stable repo rate, corrected property prices, and increased demand for personal spaces in the post-pandemic context.

According to the Ministry of Housing and Urban Affairs (MoHUA), the Indian real estate industry would be worth USD 200 billion in 2021 and USD 1 trillion by 2030. Furthermore, behind agriculture, the real estate industry employs the second-largest number of people in India and contributes 7-8 percent to the country’s GDP growth.

Secure Investment: Buyer’s market

Despite the fact that the COVID-19 epidemic struck as a surprise. It resulted in a drop in housing prices, allowing potential homebuyers to make an educated selection. In the previous year, increase demand for ready-to-move-in dwelling units has been seen throughout metros due to long-term work-from-home arrangements and online education demands. Whether a first-time purchaser or an existing homeowner searching for more room, consumers prefer ready-to-move-in residences and are apprehensive of investing in properties that are still under construction.

Factors such as historically low house loan interest rates, stamp duty reductions by some states, such as Maharashtra, and enticing offers carried out by various developers on available apartments have all contributed to India’s reviving housing market.

According to the Reserve Bank of India’s (RBI) Financial Stability Report (FSR). Unsold residential property levels have decreased to around 7 lakh units in March 2021, compared to 8.50 lakh units in the first quarter of 2020. Indicating a further improvement in house sales. Anarock’s real estate research study confirms this, stating that sales momentum in the top seven metros has surged by 93 percent yearly.

 

Why Is Real Estate Still India's Most Secure Investment?

 

Secure Investment: Prospects for Long-Term Growth

Secure Investment: One of the main reasons for investors’ attraction to the real estate market is that the value of a building depreciates while the value of a land parcel increases at a far faster rate. If investors have extra cash, they would rather buy a piece of land than invest in a low-yielding Fixed Deposit. Furthermore, rising real estate investment is fueling expectations of strong price appreciation.

When looking at historical statistics, it can be shown that the real estate industry rose by 11.2 percent from fiscal year 2005 to fiscal year 2020.

Real estate, unlike other market-linked investment alternatives such as equities and mutual funds, has a low volatility quotient. It is still one of the safest investment alternatives in India since it is a physical asset.

 

Secure Investment: Income from a side job and collateral

The ability to receive passive rental income from a property investment is a major motivator for real estate investors. Rental revenue, on the other hand, varies by city, location, demand, and property type. commercial properties are often greater than those on residential ones.  revenue from student housing. Business leases, and agricultural leases is plentiful in top metro cities such as Mumbai, Delhi, Bangalore, Hyderabad, and Kolkata.

Furthermore, in India, a property is more than just an economic choice; it has an emotional value associated to it. Aside from the potential for development and passive income. One may always pledge a property as collateral with a bank and obtain a loan against it. Such as a company loan, an education loan, and so on.

 

Low interest rates on house loans

Home loan interest rates in India are now at a 15-year low. Most banks and Housing Finance Companies (HFCs) provide house loans with annual interest rates of less than 7%. The effective rate of interest for qualified clients is less than 5% per year due to applicable tax savings on home loan repayment.

Furthermore, if a person takes out an overdraft or a house loan top-up. He receives an extra credit line at the same or 1% higher than the home loan rate. As a result, in addition to the house loan. The applicant can benefit from increased liquidity and lower credit for urgent financial requirements.

In India, a house loan is one of the most cheap bank loans. Long-term property investing is unquestionably a sensible use of lump sum money when inflation is at or above 6%. Surprisingly, a house loan of up to 75-85 percent of the property’s value is available.

 

With a mortgage, you can save money on taxes.

A purchaser might save money on taxes by repaying the principle and interest on a house loan. Each applicant for a shared home loan can claim a deduction up to the applicable maximum. An applicant can claim a deduction of up to Rs 1.5 lakh under Section 80 C on principal repayment and up to Rs 2 lakh under Section 24 under the Income Tax (IT) Act.

The tax savings are calculated based on the income tax slab rate. An extra deduction of Rs 50,000 can be claim on interest repayments up to Rs 35 lakhs. Or less under Section 80EE for affordable housing units up to Rs 50 lakhs.

 

RERA’s foresight

Home purchasers’ interests are properly safeguarded thanks to the introduction of the Real Estate (Regulation and Development) Act (RERA). The RERA has also increase investor trust in the real estate market. RERA requires builders to publish project details in a public notice. And if the developer does not have an RERA registration number, the project is considere illegitimate.

Builders must report on project progress and delays on a regular basis. As a result, the RERA has improved real estate industry accountability and openness.

Finally, there is no such thing as a “one-size-fits-all” investing opportunity. Before making a selection, the investor must assess his or her investment horizon and risk appetite. Make the calculations and get professional guidance. Property portals such as navimumbaihouses.com may also be used to keep track of pricing and make an educate investing decision.

 

 


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Disclaimer: The views of this expressed above are for informational purposes only based on the industry reports & related news stories. Navimumbaihouses.com does not guarantee the accuracy of this article, completeness, or reliability of the information & shall not be held responsible for any action taken based on the published information.
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