The Hindu

Good news for real estate

®The implementation of the Seventh Pay Commission recommendations this year is expected to be one of the biggest beneficiaries to the sector.

Approximately Rs.1 lakh crore is being released as part of the hike in salaries of central government employees and an additional amount would be paid as arrears (retrospective effect).

Defence personnel and pensioners too would benefit from these recommendations.While expenditures on holidays, clothing, gadgets, and buying cars are expected to be high, people are also slated to invest in real estate and work on renovating their existing houses.

Taking the cue, State Bank of India has announced cheaper home loans exclusively for central government employees, hoping that people would start investing in realty.

Going by past experiences of such pay revisions (Sixth Pay Commission was awarded about eight years ago) people have indeed invested a good portion of such largesse received in property and the real estate and banking sectors expect an encore. It is advised that those who are the beneficiaries of such schemes should first consider saving/investing in good asset classes.

It would also be a good idea if one can terminate any long-term loans or even reduce the loan burden which will again put more money in the pocket by way of lessened EMI outflow.

Prudent money management is the key.

Courtesy – The Hindu

Vikash Pathak