Why ULIP mis-selling has become rampant ?

The real estate market is showing some signs of recovery after the plunge during lockdown. Mirroring this trend is the rising demand for housing loans. Both these factors hint at rising demand for realty. Teena Jain Kaushal of Money9 spoke to Atul Monga, co-founder and CEO, Basic Home Loan,  on the current trends in the real estate market. 

Is it a good time to buy a property?

Just like many other sectors, real-estate industry also got hit by the Covid-19 pandemic, in the early part of FY2020. However, with prompt government intervention there was an uptick in demand from the second part of the year. With reduction in repo rates, home loan interest rates are currently all time low, making EMIs more closure to rental payments. Developers have also become flexible and are offering various offers to the new buyers which includes GST benefits, delayed EMI payments etc.

Furthermore, with the reduction in deposit rates, investing in a new house has become attractive given a lot of inventory is available at reduced costs in the market. With low-cost financing options and attractive offers from developers this is definitely a buyers’ market and presents an excellent opportunity for potential home buyers to get their dream homes.

How has been the buying trend in Tier-II and Tier-III cities?

The Covid-19 has definitely impacted our lifestyles for a long term. With work from home and online classes becoming a daily norm, consumers prefer larger places and the ideal choice for them is outside of major cities. This has led to an increase in sales of homes in the outskirts of tier 1 cities. In addition, people are buying new homes in tier-II and III cities both from the purpose of investment and as secondary housing options. Lockdown has also taught us the value of having a home and with support from the government in forms of schemes like “Housing for all” and “Pradhan Mantri Aawas Yojna” many migrant workers are buying their own homes in their native cities.

In addition, from the supply side there is good inventory coming to the market for sales. Tier-II and III cities gives better incentives to the developers.  As with increased connectivity, rising economic activity and lower land costs, developers are able to turn around a project faster and are able to book returns in shorter time frame. This has led to a lot of new construction projects coming up in tier-II and III cities.

Is there any uptick in affordable demand in the country?

India is steadily working towards its goal of “Housing For All”. With aspirations to become the top five economies by 2030, the government is focused on the well being of the lower and middle income households.

Since the outbreak of pandemic, buyers are mostly looking at buying ready to move-in properties than the under-construction properties. The demand grew during July -September Quarter, as the initial fears of deeper slump subsided, people became more accustomed to the new normal of work from home. and serious migration to tier-II and III cities became a trend.

Affordable Housing is a priority area of the Government and policy support through their ongoing initiatives such as Pradhan Mantri Awas Yojna has helped the sector to grow significantly over the past few years.

What tax benefits are given for affordable housing?

In addition to regular rebate of principle repayment of up to Rs 1.5 lakh under section 80C and interest repayment of up to Rs 2 lakhs under section 24, the Government provides additional tax deduction of  Rs 1.5 lakh to first time affordable home buyers. This additional deduction of Rs1.5 lakh of interest payment is over and above to existing Rs 1.5 lakh of deduction and is only applicable to home loans sanctioned after 1 April 2019.

How do you help as a company in providing affordable housing?

At BASIC, we aim to make home loans process faster, stress-free and basic for middle- & low-income groups. We follow a “Phygital” approach where each customer of ours is hand-held by our experienced agents for end to end fulfilment at no additional cost. Everything from documentation to disbursement is done by our agent. This results in customers getting better products through digital comparison, faster disbursements through agent led fulfilment, and complete transparency of the loan process at the convenience of his/her home.