A 2017 Festive Season Primer For Homebuyers
The year 2017 has not exactly lived up to the expectations of the residential property sector. RERA has been deployed, but as of today, only 18 states and 7 Union territories have notified RERA, while 10 states are yet to notify it. While RERA has certainly already made its expected effects felt in states like Maharashtra - which includes very important markets like Mumbai and Pune - it has not yet extended its full influence over parts of the country where RERA it is probably needed the most.
Though Haryana and UP have notified RERA, they are yet to set up the portal via which developers can upload their applications for registration of their projects. The web portal is also critical for buyers, as this is where they can check the details of projects. Also, these two states have come under heavy criticism for diluting the Centre’s RERA norms.
GST, while technically a good move for all industries, has brought more confusion than benefits to the residential property sector so far, with GST exemption currently being used as a marketing gimmick without being fully understood by buyers. On the positive side, home loan rates have sunk to a 10-year low and property prices in most cities have also been reduced to the lowest point that developers cannot afford to bring them without actually dooming their businesses.
As we look at festive season 2017 - the period around which a huge number of Indians hope to time important investment decisions - some advice to aspiring home buyers who have delayed their plans for long and wish to delay no further is definitely in order.
Let’s start with some good news. If you're looking to buy a home for self-occupation, now is probably the best time you could have hoped for. There is a massive supply of ready-to-move-in property options available at rates which would have been considered impossible 4-5 years ago. Even if your budget is modest, you are no longer restricted to under-construction projects which may take years to be completed. You can literally buy and move in now.
The residential market now primarily favours end-users. If you're an investor who is hoping for some quick profits, look elsewhere because Indian residential property is definitely not what you're looking for. However, if you are a patient long-term investor who understands property cycles and market readings, your star currently shines as brightly as the end-user's. Four or five years from now, your investment - as long as you have picked the right location and project - will have grown sizably in value.
RERA is your friend. It may still be struggling for a proper foothold in some parts of the country - but it is here to protect you. If you live in a state where it has been fully deployed and prefer to buy in an under-construction project, refer to the RERA website, look for projects by reputed developers who have committed to reasonable completion timelines and buy with confidence - your interests are genuinely protected now. Ready-to-move projects are also covered, and you're therefore assured that any flaws or deficiencies in a ready flat must and will be corrected in a specified period.
If you live in a state where RERA has not been deployed yet (or where the laws have been heavily diluted), focus only on ready-to-move-in options unless the developer is of impeccable market repute. Some names are synonymous with reliability since they bring with them the assurance of high capitalization and a strong reputation for timely delivery, assured construction quality, good amenities and sticking to the promised development plans. You know who these developers are. Play it safe and patronize their projects, and RERA becomes a factor that you need not worry about too much.
Don't give in to impulse. Remember, this is a buyer's market and it is you who is in the driver's seat. This means that you can study as many projects as you need to before making a purchase decision. If you want to buy your home in this festive season and therefore do not wish to launch a time-consuming property search, enlist the services of a reputed property consultancy. You will cut down not only on the search time but also on the price and paperwork.
Remember that a credible property consultancy/consultant:
* Does NOT charge you brokerage (the developer of the project you select is the only party who pays brokerage)
* Is duly registered under RERA, has a registration number to prove it and can explain to you all the nuances of this important Act
* Offers you a wide spread of options based on your budget, choice of location and other preferences, and does NOT try to hard-sell you anything
* Negotiates with the developer on your behalf and also helps you with obtaining a home loan
* Is with you from the start to finish of your home hunt – literally from the initial search to when you move in – and even after that
Understand your current and future finances. If you are currently at the very outset of your career, it may make more sense to rent for a couple of years rather than buy at this stage, even if you have sufficient reason to be confident of your growth graph. Property prices are unlikely to grow significantly over the next 12-18 months, and if your salary grows in this period, you will still be able to buy a good home two years from now.
Evaluate festive offers and freebies on their intrinsic value to you, rather than their flashiness. You may not really need a gold coin, probably already own a decent car, and a family holiday abroad may not make much sense if you would rather stay put and focus on your career for now. However, a free parking space, waived stamp duty and registration fees and maintenance-free periods do add to your savings, and therefore to the value of the deal. Air conditioners, modular kitchens and furnishing are also expenses you may incur on the property sooner or later, so getting them free now add real value, as well.
Finally, don't be overly focused on the cost of the property. If you have the base budget in place and are firm on wanting to buy a home now, you can leverage it via a home loan to buy into a good location, in a project with amenities which offers you and your family a decent lifestyle for the next few years.
Godspeed with your home hunt - may this festive season be the one that finally fulfils your family’s dream of homeownership.
