Over the past few years, the millennial or the young population of India has realized the significance of homeownership. With the onset of the COVID-19 pandemic and subsequent lull period in the real estate market, many people saw it as an excellent opportunity to invest in a home. The builders offering attractive discounts only spurred the investment opportunity.
While most took the bold step of investing in a home during the pandemic to own their dream space, others saw it as an opportunity to have a new asset that can provide an income source during the hours of crisis in the future. It is safe to say that amidst the pandemic, several factors are shaping the home loan trends in India. Let us look at the latest trends.
1.The millennials are emerging as one of the most formidable demographics who are willing to apply for a home loan.
2. The recent repo rate cut by the Reserve Bank of India (RBI) has brought home interest to an all-time low up to 7% in India. This is excellent news for potential home buyers, especially first-time buyers as they can enjoy the benefit of affordable EMIs while still having room for savings.
However, you must know that the lower interest rate benefits are available only for those who have maintained a high credit score of up to 750 or more. So, if you are looking to apply for a home loan, ensure to check your credit score before taking the decision.
3. To make the housing loans more lucrative for potential borrowers, many financial organizations in India have revised their interest rates. Some lenders are offering special interest rates, apart from the festive offers to encourage the youngsters to apply for home loans and accomplish their dream of being a homeowner.
4. The COVID-19 has had a significant impact on the economy both at the micro and macro levels. Owing to the strict lockdown measures announced by the government, many businesses were forced to shut down or limit their operations. This resulted in the loss of jobs for many and others took substantial pay cuts for an extended period. This resulted in liquidity issues for the people.
In such a situation to ease the home loan repayment burden, the RBI announced a moratorium period of six months, which was then extended. Many people voluntarily opted for the moratorium to get temporary relief from loan repayments. While the moratorium gave instant and temporary relief, the RBI is also discussing the restricting of the interest on the period.
5. As the financial organizations in India saw a significant rise in the number of youngsters applying for home loans, they quickly banked on the opportunity to launch new online avenues for faster loan disbursement. The modern generation appreciates prompt services that are less time-consuming. And, in the purview of the growing traction, many lenders implemented digital initiatives to help customers get their loans faster and go ahead with home buying.
The above trends are a clear indication that there is no better time to become a homeowner than now. All these trends also showcase that the real estate sector will play a critical role in reviving the Indian economy faster.