The fact that interest rates are headed down, is a feeler that the RBI seems to have thrown in to the investor and loan taker for home loans. The RBi is expected to make credit easier for consumers and corporates to attract more business for the banks and revive industries like the real estate whose rates have been stagnant for 2 years or so barring properties already given possession.
Whether a floating rate attracts you or is a fixed rate beneficial for you i always a big question, as loans are generally taken for long term when it comes to home loans. If you decide to take a fixed rate, you will know what you are paying throughout your loan tenure and the EMI will not change even if interest rates go up in the future. On the other hand, if interest rates drop in future, the borrower with floating rate will stand to gain, and pay lower EMIs. Floating rates are governed by market conditions and the RBI constantly varies rates, thus ensuring the banks do so, affecting your pocket, positively or otherwise. Monthly instalments are always a big factor in lives of people specially the middle class and a few thousand here and there turns out to be quite a lot in the long scheme of things.
The trends right now show the rates to be on the downward slide, hence a floating rate looks the way to go, but if you think that in the long run this will change, then a fixed interest with a fixed rate might just be the thing for you to go for.
Real estate is churning in investments, and big time for that matter, with reports running in, that real estate is now the fifth largest destination for foreign investments in the country and is the second largest employer after agriculture in our huge population. The industry is not saturated by any means and is expected to grow by 30 percent in the next 10 years. A decade of growth with interest rates looking to go down, could make this industry a big money roping machine for the country over the next decade. The time to invest is now and it would be wise to take a call to invest. Invest safely though.
Affordable housing schemes are in the offerings as state governments are looking to house the homeless with lucrative options. A positive government at the helm of things, is not a sitting duck by any means and is looking to make the most of the opportunity India has today. With foreign investments growing and relations with other countries looking to get better, India is attracting money like a magnet.
Why would you turn away from the reported fact that the real estate sector contributes 8% to the GDP of India? There is no reason to turn away. The real estate is inviting you to ensure good returns over the near future and the time looks ripe to invest or buy for end use. don’t miss the train.
The author Vineet, writes for Capital Tree. Based in Gurgaon, Capital Tree is Gurgaon’s finest real estate brokerage firm. honesty and transparency guaranteed. After all, we have made money for hundreds of our investors.