40% home buyers to purchase this year! Will you?

The Union Budget 2014 had provided several incentives to promote the housing sector. However, has it encouraged consumers to buy? Let’s have a look!

According to a recent poll conducted by Magicbricks, nearly 40 per cent of home buyers plan to purchase a home this year. This does not come as a surprise considering the several housing incentives announced in the Union Budget earlier this year.

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Infact, the real estate industry was expecting a revival of the market post budget.

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Immediately after the Budget was announced, the RBI also announced that individual house loans of up to Rs 50 lakh (for houses priced up to Rs 65 lakh) in metro cities such as Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad and loans up to Rs 40 lakh (for houses priced within a bracket of Rs 50 lakh) in other cities will be considered affordable housing. This might have further prompted home buyer to take the decision of buying.

However, within the sops and incentives there are loopholes that have led a large section of home buyers to defer buying decision for some more time. This was also indicated in the Magicbricks poll. For instance, the sops announced in the Budget do not really apply to metro cities such as Mumbai and Delhi NCR.

“Rebates announced really do not apply to major cities such as Delhi NCR, Mumbai and Bangalore. The average price of a home in these cities vary from Rs 80 lakh to 1.2 crore,” says Pankaj Kapoor, MD, Liases Foras. This indicates that a home buyer would have to pay an EMI of around Rs 1 lakh of which 80 per cent would go towards interest payment. Thus, the exemptions announced hardly make any difference to the buyers in these cities, he added.

As a major chunk of the housing demand comes from these cities, a large section of respondents of the poll claimed that buying a house was still unaffordable for them even though they would have wanted to buy one this year.

Thus, while 40 per cent buyers are planning to buy this year, a large per cent of the population is still hesitant to take the plunge. What will you do? Are the incentives announced in the budget enough for you to buy a house? Or will you still wait and watch?

Sruthi Kailas, Magicbricks.com Bureau

Sruthi Kailas is a keen market researcher and is currently a part of the content and research team of Magicbricks.com

Source:http://content.magicbricks.com/industry-news/nearly-40-home-buyers-will-purchase-this-year-will-you/74424.html