Atmanirbharta in the housing sector: Buying vs Renting a house
While our economy channels the roadmap of an ‘Atmanirbhar Bharat’, it seems consumer behavior is following suite - with reason. On one hand we’re coerced into seeking stability in the uncertain times of this pandemic. On the other hand, the same circumstances have caused a shift in economic and financial paradigms making buying a home much more attractive than renting.
The age old adage of “roti, kapda aur makaan” has never gained more importance than during this lockdown. A recent survey by JLL India shows that over 91% of people polled over the age of 35 prefer buying an apartment over renting one in the next 6 months. Additionally, 67% of them believed that buying a home has now become a necessity, not a luxury. A consumer survey1 conducted by Anarock during the lockdown period said that 12% respondents who were previously not planning to buy, are now interested.
Not to say that statistics are the sole force behind the shift to a buying mentality, the argument comes backed with some hard hitting facts:
1. Reduced stamp duty rates: The Maharashtra government’s latest directive2 to reduce the stamp duty rates has made buying real estate in their state an extremely lucrative option. As of 1st September, the stamp duty charged till 31st December 2020 will only be 2% and from 1st January 2021 to 31st March 2021 the stamp duty charged will be 3%. Earlier, the stamp duty charged was 5% in key cities like Mumbai, Pune, Nagpur and Nashik and 6% in others.
2. Financing rationale of renting vs buying: An increasing population is on the hunt for the apartment of their dreams from being fed up of paying supremely high rents in metros and being scared of their landlord increasing their rent any time he likes. The 5 year rental cost for city living in Mumbai is approx ₹ 28.66 lakhs (₹ 48,500 per month + standard rental escalation for this period) which is about approx 52% of the cost of owning a property in the peripheral areas of Mumbai!3
3. Low Interest rates: The repo rate to which the home loan interest rates is linked is at a 20-year low. Currently, the lowest interest rate is at about 6.85% when at this time last year, the lowest interest rate was between 8.55%-8.75%, making it the best rate in decades.
4. Special offers Low/no GST charged, low booking amounts, attractive offers and tantalising referral schemes are just some of the various freebies on table for the discerning homebuyers right now. Ready to move in flats are the fastest moving commodity right now since there is no GST charged on the same while giving prospective home buyers the assurance of being able to move in as soon as they want.
5. The new normal: With work from home becoming the norm, people are looking for houses that can adapt to their ever-changing requirements and rented home just don’t offer that kind of flexibility. Consequently, the need for larger spaces has also become more apparent with time. The onus has shifted from small city centered home to larger homes that can adapt to the changing environment easily.
6. Asset vs Liability: Ownership also gives you an asset that you can use to get you through the uncertain times whereas monthly rentals are a liability. Other popular investment asset classes such as stocks and gold are volatile and unpredictable in pandemic times. Paying the EMI for a house also has dual benefits. It not only gives you a month of shelter but also increases the proportional ownership of the house. Additionally, home loans come with attractive tax benefits; rental housing does not. Housing retains its intrinsic value in uncertain times and eventually appreciates when times improve.
Alas, looking for flats in Mumbai with a good quality of life could feel like looking for a needle in the haystack. But if you’re looking within premium communities the only worthy answer lies with Hiranandani Developers. An oasis of serenity in the hectic city, their integrated township developments offer one of the wisest, safest and most assured investments to make in uncertain times.
Hiranandani Gardens, Mumbai’s finest community, offers 1 and 2 BHK homes in Powai with unmatched lifestyle amenities. Similarly, Hiranandani Estate and One Hiranandani Park in Thane, offer a wide array of choices ranging from 1BHK - 4BHK in the ready to move in category. Rest assured, if you are a first-time homebuyer, looking for an upgrade, a larger home for your family or simply to make an investment, Hiranandani has an offering unlike any other for your every need. The integrated townships of Hiranandani Gardens, Powai and Hiranandani Estate, Thane offer state-of-the-art hospitals, schools, retail, high-street shopping and a fully functional business district, making it an ideal destination for anyone looking for a home in a premium community. Explore the world of Hiranandani and find a plethora of options, with customized offers that would make your home buying experience attractive and hassle-free. Moreover, you can book your dream home online with just Rs. 50,000 on hiranandanioffers.com. Buying your home may never look this attractive anywhere else, ever again!
Reference articles :
1. https://www.anarock.com/research-insights/anarock_covid19_indian-re-consumer-survey
2. https://timesofindia.indiatimes.com/city/mumbai/in-bid-to-boost-realty-state-cuts-stamp-duty-for-7-mths/articleshow/77773600.cms
3. https://www.financialexpress.com/money/rent-vs-buy-why-buying-a-home-makes-more-sense-than-renting-in-times-of-covid-19/1985935/