Funding Your Dream Home

Benign interest rates, policy push and fairly attractive prices—is this the right time to buy that house you have been eyeing? Anagh Pal, Preeti Kulkarni, and Himali Patel find out.

- Anagh Pal, Preeti Kulkarni, and Himali Patel

Just the way there is no right time to start investing; there is no right time to buy a house, especially if you are looking for a house to live in. A house purchase works well if you are planning to live in it, so, your first home purchase should definitely be with the same intention. Ask any financial planner about buying a house on a loan and chances are high they will dissuade you if you plan to buy when you already own a house or are paying EMIs on another house and are planning a second house purchase as an investment.

Yet today, house purchase, especially in the affordable housing segment, breaches many of the otherwise sane advices given in the earlier paragraph. The festive cheer is on us, developers are offering great deals, home loan interest rates are low and there is the tax incentive to first time home buyers, which makes home buying so tempting. The incentives under the Pradhan Mantri Awas Yojana (PMAY) have clearly played a role in price correction in the residential real estate sector. Several new housing projects announced by builders and developers are creating the interest among potential buyers to consider a house purchase owing to these factors.

“The scheme has benefited not just the lower middle class but also the middle class by lowering the cost of buying a property. As the MIG scheme has been extended till March 2019, we expect demand to gain momentum,” says Renu Sud Karnad, MD, HDFC. The scheme has come as a boon for Mumbai-based Sudhir Mishra who bought a flat in Boisar in 2015, which cost him ₹16 lakh under an affordable housing project.