EMI

It's time to hunt for your dream home

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It's time to hunt for your Dream Home

While many developers are offering attractive plans, there is also scope for buyers to negotiate for discounts
Year 2014 was the worst for developers across the country. Delhi saw the lowest sales in a decade and Mumbai in five years. The situation has not changed much in 2015 so far. Customers have been postponing a decision to buy a house due to high interest rates, rising property prices, stagnating income and late deliveries of projects.

Prices, however, have not taken a breather. Last year, property prices in Mumbai were up 10 per cent, Bengaluru saw a rise of seven per cent, and the worst-hit National Capital Region (NCR) witnessed a three per cent growth, according to property consultancy firm Knight Frank.

“Properties below Rs 5 crore in Mumbai and Delhi and those below Rs 3 crore in other parts of India will neither see any correction nor will developers be willing to negotiate rates,” said Om Ahuja, chief executive officer  (residential services) at Jones Lang LaSalle.

While experts say in luxury properties, developers are ready to sit across the table and willing to settle at a lower price, some also suggest builders are hard-pressed for funds and might provide some discounts rather than turning away a customer. Nevertheless, many developers are providing different offers and giving flexible payment options as well.

“This is the best time to buy a property. Developers might not discount price but are willing to accept payment for the on customer’ convenience,” said Mudassir Zaidi, national director (residential), at Knight Frank India. There could be other charges that builders would be willing to forego, such as premium for preferred location or floor. Some might even offer free stamp duty and registration, Zaidi added.

Realtors have also been offering schemes wherein the customer pays 20 percent upfront and 80 per cent on possession. There are also offers where developers bear the interest on a home loan for the initial two-three years while the project is under construction. Some are even willing to write a cheque equal to the interest a bank is charging the customer each month. However, in such schemes, buyers need to be careful of the fine print.

While sales are expected to pick up as interest rates fall, and increments at jobs normalise, such a scenario is some time away. While experts don’t expect significant movement in prices this year, as the market picks up, the schemes and offers could disappear. “We have seen in the past that when equity markets rise, people start parking profits from stocks in realty,” said Ahuja.

Experts pointed out that those waiting for interest rates to come down might not get a significant benefit. If you take a loan of Rs 80 lakh for 20 years at the prevailing interest rate of 10.15 per cent, the equated monthly instalment (EMI) comes to Rs 77,998. If interest rates drop 50 basis points this year, the EMI is Rs 75,356. This translates to annual savings of Rs 31,704. “The benefit available through offers and scheme right now are far higher,” said an official with property consultancy firm.

For price-conscious buyers, Samir Jasuja, CEO of PropEquity, suggests secondary market. “This year, there will be a slew of projects that will get completed and investors in these are waiting to book profit. Such houses would be available at 30 per cent discounts to the prevailing market price,” said Jasuja.

This scenario is especially true in northern India markets. While the secondary market is tempting, existing owners might ask partial payment in cash, thereby raising the upfront money you have to shell out.


- by Tinesh Bhasin

Source :- Business Standard

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