Indian Millennial Women Prefer Housing for Investment and End-use

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Indian Millennial Women Prefer Housing for Investment and End-use

 

 

Anuj Puri, Chairman – ANAROCK Property Consultants

  • For 57% women, Indian real estate is the preferred asset class for investment, followed by 28% in stock market, 11% FDs & just 4% in gold
  • Of all those looking to buy property for investment purpose, at least 45% want to sell the property after appropriate appreciation, only 32% want to earn rental income
  • Women homebuyers benefit from lower stamp duty charges, low home loan interest rates, and tax deductions
  • Women to mandatory be either co-owners or sole owners of affordable homes

There’s a famous saying – the hand that rocks the cradle rules the world. This is so apt today, as women are excelling across sectors and increasingly making their mark in a male-dominated world.

The 21st century millennial woman is progressive and increasingly financially independent. This had led to a distinct shift in her investment preferences – where gold and fixed deposits were the primary choices for Indian women, real estate now rides high in her investment portfolio.

In fact, in the latest ANAROCK-LIC Housing Finance Ltd. Consumer Sentiment survey, nearly 18% participants were women. Among the many highlights of this survey – nearly 57% women respondents preferred real estate as an investment asset class, followed by 28% for stock market, 11% for FDs and a mere 4% for gold.

This is hardly surprising – a woman’s relationship with her home is unique; and while any other ‘relationship status’ may change in today’s rapidly-evolving socio-economic scenario, owning a home in her name gives her the ultimate security in a changing world.

ANAROCK’s survey also reveals that:

  • Among those looking to buy property from investment perspective, nearly 45% women home seekers would sell the property after appropriate appreciation while 32% would prefer to earn a steady rental; only 23% are looking to build it as an asset for the future.
  • Merely 18% would prefer a new launched property, 58% would opt for those that will be ready within a year and 24% would buy ready homes.
  • 63% women prefer 2 BHKs followed by 23% preferring 3 BHKs & merely 14% seeking 1 BHKs. Contrary to the increasing conservative preference for compact homes, the Indian millennial woman does not want to compromise on property size and among those seeking 2BHKs, more than 50% are seeking large-size ones.

These trends vouchsafe that women are emerging as a critical homebuyer segment in India – not just a ‘niche’ segment – and that marketers and developers must re-strategize their business approach to include them as a major target audience.

Forget about the clichéd stereotype of women beaming their joy in fancy kitchens or playing with their children in the garden. Today’s women share the same priorities that men do – they are in complete control of their homes, and that including owning them. Property marketers must factor in this important change in their customer demographics.

The rapid increase in women homebuyers across the country has also prompted the Government to give them added benefits. To empower women of low-income segment as per the Housing for All by 2022 mission, the Government has also made it mandatory for them to be either co-owners or sole owners of affordable homes.

Property Purchase – Advantage Women

There are also many benefits that women can avail in India by buying and registering a property in her name. Lower stamp duty charges, low home loan interest rates and tax deductions are some of the benefits they are entitled to while buying a property.

While stamp duty charges are lower if property registration is executed in the name of a woman, these charges vary from state to state. The exemption for women varies between 1-2% across different states. In some cases, it might even vary within a particular state, based on the classification of regions as ‘urban’ and ‘rural’.

For instance, Delhi, UP, Rajasthan, Punjab and Haryana offer a relaxation in stamp duty for women buyers. Punjab has a whopping 4% difference between male and female payers of stamp duty.

On the contrary, the stamp duty rates in Maharashtra are uniform for both men and women at 5% with additional 1% surcharge for Mumbai homebuyers. However, the other states where stamp duty rates are lower for women include:

State For Men For Women
Delhi 6% 4%
Haryana 5% in rural

7% in urban

3% in rural

5% in urban

UP 7% Rebate of Rs 10,000 on overall charges
Rajasthan 5% 4%
Punjab 8% 4%
Maharashtra* 5% 5%

(Note: These charges are indicative and subject to change)

* Homebuyers in Mumbai have to pay additional 1% surcharge

Additionally, many banks such as SBI, ICICI, HDFC, etc. offer discounted home loan rates to women as compared to men. This variation varies from bank to bank and goes up to nearly 0.25%. 

  • For a regular home loan up to 30 lakh – Interest rate for women borrowers from SBI for instance is 7.90% onwards, while for male it is 7.95% onwards.
  • For a loan amount between Rs. 30 lakh to Rs. 75 lakh – While SBI and ICICI bank have an interest rate of 8.2% onwards for women and 8.25% onwards for men, HDFC has a uniform rate of 8.25% onwards for both men and women borrowers
  • For a loan amount of Rs.75 lakh and above – SBI charges 8.25% onwards for women and 8.30% onwards for men while HDFC has uniform rates for both borrowersFurther, to avail certain tax benefits, a woman can also become joint owner of a property with her husband and, if she has a separate source of income, both can claim tax deductions individually.

The favourable lower stamp duty rate for women can and does, to some extent, influence decisions on whose name a property is registered under. This can be a geographically-determined dynamic, as different parts of India have different cultural viewpoints on this.

For instance, matriarchal societies in South India, Goa and the North East do give women the upper hand in many matters, including in property ownership. Other parts of the country are more male-dominated and a variation in stamp duty rates may not skew property purchase decisions in favour of women.

In the past, it has been observed that property registration is done in the name of a woman of the family to reap the benefits of lower stamp duty, but shortly thereafter, the property is re-registered in the name of the male member. For this reason, some states have barred re-registration of property in the name of a male before at least one year.

The bigger difference of this provision would lie in the fact that it is an incentive for women to purchase homes independently, regardless of marital status, and for properties to be registered in the name of daughters.