This is the right time to buy a budget home in Bengaluru

This is the right time to buy a budget home in Bengaluru

A 100% tax exemption along with exemption from service tax is like a boon for many developers that are ready to construct houses with sizes up to 325 sq ft in metros and 650 sq ft in the other cities. The developers will undoubtedly try to take the full benefit of this law. 

The announcement of policies on cheaper homes being offered to people has clearly evoked a big response in the first quarter of 2016. There has been a steady increase in price of new launches across the city of Bengaluru. The property consultant Cushman & wakefield says that the percentage of rise in price of new launches in the first quarter was the highest in the last two years. The city is becoming a hot spot for those people looking to buy budget houses that suit their financial framework. Even though there has been a sharp drop in the new launch prices, the demand is likely to pick up in the near future. So, now is the time to start thinking of buying your dream home.

Why now

Albeit there is no specific definition of affordable housing, an apartment ranging below Rs.50 Lakhs is considered a budget house, as per the present standards. In other words, projects costing anywhere between Rs.2800 and 3700 per sq ft are thought to be of affordable figures. Previously, there were apartments available in this range but in locations that lacked proper infrastructural facilities. Normally, schools, shopping centres and institutions are very much necessary to drive the business of real estate in any location. But, such facilities are not available in certain locations as of now. “This mismatch will definitely be set right in the future,” says Anuj Puri, country head, JLL India.

The tax exemption that the government has announced very recently will undoubtedly increase the sale of affordable housing units by 15% to 20% in future. This will also indirectly persuade investors from abroad to focus their attention on this segment, according to Satish BN, executive director, South, Knight Frank India. Apart from everything, this year’s budget has announced an additional deduction of Rs.50000 on interest repayment of loans up to 35 lakhs. This will further drive the real estate market in a positive manner. Moreover, according to Satish, the real estate bill is getting passed very soon in favour of end-users to further ease their difficulties.

Basic and within budget

While residential sale is likely to pick up, the cost of plots remains the same in most areas. Though there is 100% tax exemption and exemption of service tax announced by the government for constructions up to 325 sq ft in metros and 650 sq ft in other cities, developers are still going to take benefit of this situation to reduce the size of apartments, according to Satish BN.

To curtail cost, the builder may resort to doing things such as limiting the amenities to the very basic levels. There may only be car parking and power back-up, for instance. You can’t expect a full-fledged clubhouse with futuristic amenities. By doing this, the developers will try to limit their spending.

As of now, many affordable housing segments are found in Anekal, Attibele, Hosa Road, Begur, Bidadi, Kammasandra, Kengeri, Chandapura, Hoskote and Rajanukunte. These areas are a bit away from the central part of the city. "The city will continue to come up with more affordable housing units in areas such as KR Puram and Kanakapura Road (after NICE Road) due to massive availability of land parcels," says Satish BN.

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