As per leading English daily ET “In the wake of the pandemic, many companies have mentioned that their employees would continue to work from home until June 2021. Consequently, home buyers are looking to buy properties that are not only more spacious but also located in less populated areas, irrespective of their distance from the workplace. The Covid-19 outbreak has triggered the demand in the outskirts of cities like Bangalore, Chennai,, Delhi-NCR and Pune as working professionals need a home that can accommodate workstations along with a study room for kids.”
Further “If early signs are anything to go by, real estate is one sector that is going to be the hottest theme of Calendar 2021. In fact, it may also give a new lease of life to some other sectors that depend on it. Macro data and early numbers reported by the real estate companies suggest a recovery is on the cards. Encouraged by lower property prices, cheaper loans and encouragement from the government authorities, demand has picked up.”
Will the trend continue? Going by the signals the market is sending out and management commentaries, the answer is in affirmative.
As per ET reports, the Covid-19 pandemic has also accelerated demand for houses in tier II and III cities due to reverse migration, availability of better value-based pricing, better returns, larger spaces, and lower cost of construction. Leading developers like DLF, Emami Realty, ATS, Omaxe and Alpha Corp have shifted focus towards smaller cities to monetise the land banks they had held for long.
Indian investors in the housing sector who are on older loans and mortgages, are being advised that simply switching to a better rate could see them save huge money over the life of a loan. A significant number of home loan borrowers have not switched lenders for several years, yet they stand to save so much money by doing so.
Why? The experts report highlights that borrowers could save money by asking for a lesser rate from their current lender/bank or shifting to a new bank.
“There are obstacles in the way of home loan borrowers shifting lenders, such as a lack of transparent lending rate, as well as inconvenience and time costs, still switching will be worth the effort. Our recommended prompt would clearly set out for many borrowers just how much higher their interest rate is compared to new borrowers. This information would be a huge savings for borrowers to seek a lower rate from their current lender or to shift over to a new lender.
It would also encourage banks to offer their existing borrowers better rates, promoting greater competition in the sector. As loans age, the difference between the rates paid on older loans as compared with new loans increase. Borrowers with loans more than 10 -12 years old were, on average, paying many basis points more than the average interest rate paid for new loans.
If you are a borrower of older home loans, you would be surprised to know that borrowers with new loans are likely walking into the very same lending institute/ bank, you have your loan with and getting much much lower interest rates.