4 reasons why 2022-23 will be the best for first-time homebuyers

Most real estate experts would corroborate with the fact that Coronavirus only deferred home-buying decisions of potential investors and did not suppress it altogether. Most of the first-time homebuyers just postponed the idea and waited for the pandemic to get over.

No doubt, the Coronavirus has posed severe challenges in front of the entire real estate industry, the property market is upbeat again and will certainly prove to be a rewarding year for first-time homebuyers. Here is why the year would prove beneficial for them.

Reasonable Real Estate Prices

Despite the anticipation of a steep price rise, the onset of the omicron virus and the Russia-Ukraine conflict has again destabilized the global investment scenario and the price rise, in most likelihood, would be deferred till the year-end. Even if property prices have increased in some pockets, it is reasonable and still keeps the property market affordable for a first-time homebuyer.

As the real estate industry could not achieve the desired sales numbers in the past couple of years, the pent-up inventory and the eagerness to clear the housing stocks are preventing the prices from soaring. What better time can there be than the present one to own a house for the first time?

Handsome ROI Opportunities

Real estate investment is both financially and emotionally intensive decision. No matter If the property is bought for the living purpose in the shorter term, the element of return on investment and price appreciation always remains on the investors' minds. With attractive and affordable real estate prices, first-time investors are not letting go of this chance. It is pertinent to mention the booming Tier II and Tier III cities. Instead of investing in megacities, property buyers are actively exploring options in smaller cities. As investment is way affordable in these cities, the return-on-investment potential is attracting investors from all directions.

Moreover, real estate experts are anticipating an average hike of over 30 per cent in real estate prices by the year-end. Money invested in property today will appreciate into a rent yielding asset tomorrow. There can be no better time for investment than this year.

Falling Returns in Other Instruments

With coronavirus pandemic in the backdrop and the global conflicts abound, the returns from traditional investment instruments are continuously falling. Traditionally, the investors would park their surplus money in Fixed Deposits (FD), Gold and Post Office savings schemes. However, the meagre returns of 4-5 per cent annually have discouraged the investors from investing in traditional instruments and looking towards the property market. On the one hand, it creates a solid asset for the investor, it also guarantees a handsome return over the long term.

With a multitude of options ranging from plots, commercial real estate, independent villas, small flats and villas among others and their easy presence on popular real estate portals, investing in property has never been easier for first-time investors.

Government Push

The Indian government is continuously focusing on the mission of 'Housing for All' by 2024. With its flagship schemes such as Pradhan Mantri Awas Yojana (PMAY) and affordable rental housings schemes, the exchequer is trying hard to make the housing as affordable as possible. In the recent budget, the Pradhan Mantri Awas Yojana (Gramin) was extended to the year 2024. This shows a continuous commitment towards the affordable housing segment.

With schemes such as Credit Linked Subsidy Scheme (CLSS), the first-time homebuyers get a handsome subsidy for buying a house. This subsidy is categorized in accordance with the income of the applicant and provides ownership benefits to the women members of the family. The subsidy is given on the home loan taken to avail of the house.

Conclusively, with an opportune investment environment, justified property prices, Government push and abundant ready inventory, there can be no better year to invest in the property market than this one.

(Article is authored by Dr. Atul Goel, MD, Goel Ganga Group & President (Elect.), NAREDCO Pune)