STABILITY, LOW INTEREST RATE SET TO PUSH REALTY MARKET
B S Manu Rao
The Times of India (Bangalore edition)
At this point in time, there are two questions floating around in the property market. On the minds of buyers is the poser that begs for an answer during a downturn - will prices drop further. The course of the economy and when the property market will open up again, bringing in the flood of pent up demand, is the question the industry is debating.
Either way, property is a business everyone wants to see picking up. This sector contributes significantly to the GDP and opens up opportunities for a host of segments.
Perhaps the first welcome sign of the downturn bottoming out here has been seen in the job market. Headlines announcing the traumatic retrenchments are no longer visible. The insecurity is not as pronounced and many are sure the slide has been stemmed. This is the first step towards a more vibrant property market. A secure job is the basis for a homebuyer to look for that dream home. With job security comes the demand for homes as most would like to buy their first home as soon as possible to finish the loan quicker and possibly look for a property investment next.
“In the IT sector, there are some positive signs since the last quarter. This indicates that business could be looking up. On the job front, the large-scale retrenchment phase seems to be behind us. With this positive trend continuing, techies could look at buying property again,” says K S Narahari, Director (Communications and Internet Marketing), Texas Instruments India. "These sentiments are certainly much more positive than what existed in the sector six months ago", he adds.
Home loan rates
In times of tight household budgets, the single-digit home loan rate is a major plus point. Even with job security, a prospective homebuyer will find it more comfortable to repay a home loan at nine percent than the 12 percent levels prevailing a quarter ago.
Finance is the most significant part of buying a home. It spans across many years. A low interest rate regime fuels the property market with salaried investors buying property as a long-term option. The capital appreciation in property over a long term is huge and never lets an investor down. This is especially so given the home loan tax benefits and rental income property yields. These bring down the effective cost of loan, and hence cost of investment.
B S Manu Rao
The Times of India (Bangalore edition)
At this point in time, there are two questions floating around in the property market. On the minds of buyers is the poser that begs for an answer during a downturn - will prices drop further. The course of the economy and when the property market will open up again, bringing in the flood of pent up demand, is the question the industry is debating.
Either way, property is a business everyone wants to see picking up. This sector contributes significantly to the GDP and opens up opportunities for a host of segments.
Perhaps the first welcome sign of the downturn bottoming out here has been seen in the job market. Headlines announcing the traumatic retrenchments are no longer visible. The insecurity is not as pronounced and many are sure the slide has been stemmed. This is the first step towards a more vibrant property market. A secure job is the basis for a homebuyer to look for that dream home. With job security comes the demand for homes as most would like to buy their first home as soon as possible to finish the loan quicker and possibly look for a property investment next.
“In the IT sector, there are some positive signs since the last quarter. This indicates that business could be looking up. On the job front, the large-scale retrenchment phase seems to be behind us. With this positive trend continuing, techies could look at buying property again,” says K S Narahari, Director (Communications and Internet Marketing), Texas Instruments India. "These sentiments are certainly much more positive than what existed in the sector six months ago", he adds.
Home loan rates
In times of tight household budgets, the single-digit home loan rate is a major plus point. Even with job security, a prospective homebuyer will find it more comfortable to repay a home loan at nine percent than the 12 percent levels prevailing a quarter ago.
Finance is the most significant part of buying a home. It spans across many years. A low interest rate regime fuels the property market with salaried investors buying property as a long-term option. The capital appreciation in property over a long term is huge and never lets an investor down. This is especially so given the home loan tax benefits and rental income property yields. These bring down the effective cost of loan, and hence cost of investment.
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