Should you buy a home this Akshaya Tritiya?

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From free gold coins to savings on Goods and Services Tax (GST) on under-construction properties, developers are attracting potential homebuyers with a wide array of offers and schemes on Akshaya Tritiya.

Our country is majorly influenced by cultural traditions and rituals which have an impact on the home buying perception. Buying a home is considered to be a lifetime investment among the Indian community, and there is a surge in demand during certain festivals such as Diwali, Dussehra and Gudi Padwa due to the auspiciousness/prosperity quotient associated with them. Akshaya Tritiya is one such occasion which is considered auspicious in India to invest in gold and property. As per a popular belief, the value of investments made in gold and property on this day would surge in future.

According to Deepak Goradia, Vice Chairman and Managing Director, Dosti Realty, “While any time is a good time to invest in real estate, festive occasions tend to have attractive prices coupled with various other benefits like concessions or gifts, subvention schemes, exemption on registration fees, stamp duty or GST and lower down payments which trigger the demand for housing.” Besides, with the impact of pro-market reforms finally visible and the property prices being relatively stable, there is not a better time for potential homebuyers and fence-sitters to take the plunge.

99acres.com takes a look at some of the factors that make Akshaya Tritiya an ideal occasion for investment in real estate:

Buyer-friendly marketAkshaya Tritiya

In the last few years, property prices across top metro cities have either remained stable or nosedived in certain micro-markets, thus making the current market favourable for homebuyers. The market allows potential homebuyers to opt for a home by paying 15-20 percent less than what they would have paid around three to four years ago. According to R K Arora, Chairman, Supertech Limited, “Homebuyers are regaining their confidence in the Indian real estate market on the back of enhanced transparency brought in by the implementation of pro-market reforms such as Real Estate (Regulation and Development) Act (RERA) and Goods and Services Tax (GST). The stage is set for them to turn their dreams into reality on the auspicious occasion of Akshaya Tritiya.” Moreover, with the current property market relatively stable, fence sitters have a chance to go ahead and finalise their home purchase decision.

Akshaya Tritiya

Tax benefit on home loan repayment

Purchasing a home today comes with numerous tax benefits as the current government has shown great zeal in encouraging people to invest in the property market by offering them various sops. For instance, homebuyers who opt for a home loan are now entitled to get income tax exemption on home loan repayment under section 80C, 80EE and 24, thus lowering their tax outgo.

Akshaya TritiyaWide range of offers to choose from

Festivals such as Akshaya Tritiya and Gudi Padwa are considered auspicious for property investment, and developers are leaving no stone unturned to woo the potential homebuyers with lucrative offers and schemes. From flexible payment plans to no floor rise charges, several offers are being floated out by the developer community during this period. Besides, developers are also riding high on the current positive home buying sentiment floating in the market and offering schemes such as subvention plans, rent and earn an option, and saving on GST across different projects.

Investment in gold vs property

Besides property, a large chunk of the population prefers to invest in gold and other similar investment assets during Akshaya Tritiya, which are more volatile in comparison to real estate. While investment in a property leads to wealth creation, gold is simply a way to stock wealth in a paperless form. Besides, loan against gold is expensive as compared to loan against property and does not offer adequate liquidity to the investor. Moreover, purchasing a property comes with several tax benefits which is not true in the case of gold.

Gold

Property

Offers minimal gains with fluctuation in returns.

Can generate regular rental income and good for long-term investment.

Gold is highly volatile and its value changes on a daily basis.

Comparatively low volatile as compared to gold and other investment options.

Does not offer tax benefit.

Offers tax benefits on home loan repayment.

 

With the current property market inclined towards buyers, developers are optimistic that the festival will further enhance the sentiment and bring back positivity and vibrancy in the sector. Probable buyers should, however, make note that the different projects differ in term of festive offers due to the location, ticket size, and specialisation of the property. Goradia adds that properties in emerging locations tend to have more attractive offers in comparison to developed areas. There are even times when banks and other financial institutions provide festive benefits in the form of lower rates of interest for home loans and flexible payment schemes to further streamline or ease a buyer’s purchase experience.

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