With the revision of home loans and policy boosts in the Union Budget, the real estate market is poised to be user-centric and affordable. Not long ago, property in Indore was largely a luxury-centric market, but recent policy changes have made housing affordable. The demand for residential property in Indore real estate sector is slowly increasing due to various influential factors like demonetisation, subsidisation of home loans, and fall in interest rates. If you are planning to purchase a new house in Indore, this is the best time to take action.
The new changes made by the Government have done more than just succeed in revamping affordable housing in Indore. The policies have also helped increase the demand for homes in the city.
Indore to Experience a Rise in Demand for Affordable Housing
- Home loans become affordable thanks to demonetisation: The recent demonetisation has led to a drastic rise in the cash flow to banks. Individuals hoarding black money were compelled to deposit their money to avail of the new currency. As a result, banks were flush with cash, which in turn led to a fall in their interest rates. This has made home loans more affordable leading to an increase in the demand from those seeking to purchase a home.
- Change in tax rules: Earlier, properties that hadn’t found buyers yet were also taxable. Once a property had been initiated, the builders had to pay tax even if it remained unsold. This caused builders to pass on the tax burden to consumers by charging higher prices for flats. With the recent tax changes in the union budget, builders are no longer liable to pay tax on unsold properties. This could help facilitate a dip in property prices and as a result, make flats more affordable for customers thereby increasing the demand.
- Subsidisation of housing loans: Earlier this year, the National Housing Bank announced that it would refinance housing loans amounting to Rs. 20,000 crore. This move is meant to enable lending organisations earn adequate subsidies and offer lower interest rates. As a result, home loans will become much more affordable for the middle-income group and empower them to purchase new homes without any hassle or worries. This will also help increase the demand for homes, as borrowers are likely to be less hesitant to avail home loans.
- Introduction of MCLR interest rates: The base rate system was prevalent in the past, but now, the Government has made marginal cost of lending rates a norm for banks. The base rate systems bound lending organisations to a specific rate of interest, below or above which they could not do any business. The MCLR system for home loans, however, enables lenders to calculate their various costs of operation and even include a profit margin in the interest rate. This move is aimed at helping to reduce interest rates on home loans and could potentially increase the demand for such loans and in turn even stimulate the demand for property.
Overall, here are the best localities to invest in, considering growth in property value in Indore:
- Bicholi Mardana—20% increase in property value over 4 months.
- By Pass Road—4% increase in property value over 4 months.
- Mahalakshmi Nagar—2% increase in property value over 4 months.
- A B Road—2% increase in property value over 4 months.
- MR 11—1% increase in property value over 4 months.
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