A growing need for homeownership after Covid

A growing need for homeownership after Covid

The Indian real estate market shows signs of steady recovery with residential and commercial property segments recording robust performance. A growing need for homeownership after Covid and stable employment scenarios led by sectors like information technology and healthcare drove housing demand during the last quarter. Real estate activity gained momentum during the quarter as the country began to cautiously return to normal economic tempo supported by aggressive vaccination drives.
Record-low home loan interest rates and sops offered by real estate developers helped top Indian property markets move upward after a covid. Real estate that generates income or is otherwise intended for investment purposes rather than as a primary residence. It is common for investors to own multiple pieces of real estate, one of which serves as a primary residence, while the others are used to generate rental income and profits through price appreciation.

As Economists perceive the choices of property for homeownership

Buying a Home: Economists perceive the purchase of a home as an asset or something that has value. Its value keeps appreciating over time while providing a return on investment in the form of rental or leased income.

Generally, the funding for the purchase comes through a loan. Economists feel that a loan leads to an additional financial burden on an individual. However, a home loan can be efficiently managed by meticulously planning one’s finances and setting aside a corpus only for paying the monthly installments, since there is a growing need for homeownership after Covid. Purchase of a plot or home involves points such as budget, location, area, amenities, and other finer aspects.

Renting a Home: When you rent a home, you are paying a monthly amount for using the property. The funds that one would otherwise pay for the purchase of a property can be utilized for investment purposes.

However, when one stays on rent, he is deprived of the joy of staying in one’s own coveted home. After looking at both scenarios, we can conclude that buying and renting a home has its pros as well as cons. A popular adage runs as Successful investing is about managing risk, not avoiding it”. When we utter the word investment, there is bound to be risk associated with it. The striking aspect is that investing in real estate helps the investor in meticulously managing this risk. BSNL is such a risk-free investment option for buying a plot at Devenahalli, Bangalore.

Here’s how investment in land/real estate is a better option than mutual funds, especially during the unpredicted times of pandemic.

The decision about renting or owning a home in a metro city

India’s metro cities such as Bangalore, Delhi & Mumbai, Chennai have transformed into global cities in the past two decades and the cost of living over there has been increased rapidly ever since. With several global MNCs setting up offices and development centers in India’s big cities, residential as well as commercial property demand has increased significantly.

Migration to metro cities in search of employment opportunities has also increased their moving population. This transferring population is in search of accommodation either as paying guests or in a rented apartment.

When one rents a house, he saves on the money that he would have otherwise spent on the purchase of a property. These same surplus funds can be invested in options such as bank deposits, stocks, or mutual funds. However, the flip side is that staying in your own home is more satisfying than staying in a rented house. Buying a property in many cases also involves opting for a home loan. This loan needs to be repaid to the bank along with an interest. Renting a home provides financial freedom. One does not have to worry about the repayment of loans. However, the downside is that one is deprived of the joy of owning a home and staying in it. Whereas buying a home is regarded as a milestone event in a person’s life.

In India, there are immense sentiments associated with the purchase of residential property. Staying in your own home is regarded as a sign of wealth in Indian culture. Buying a home involves investing one’s entire life’s savings. So, the decision needs to be made with a lot of thought. A home is a necessity and is often grouped with food, clothing, and water. People either stay in their own homes or prefer to rent a home.  It all boils down to personal choice. Some prefer to buy a home; others prefer to rent it. There are pros as well as cons to buying and renting a house.

Investing in real estate: Land is an extremely scarce resource. It is probably the only element that cannot be created from the scratch. Owning a property means owning a piece of planet earth. This feeling of buying a property cannot be equated with intangible assets such as mutual funds and stocks and that is why there is a growing need for homeownership after Covid.

Since land is a resource that is in short supply, its value keeps appreciating. Those who purchase property purely for investment tend to gain substantial returns that are much higher than those offered by other varieties of investment. Many High Net-worth Individuals have made their fortune through real estate. There are properties worth billions of rupees being purchased and sold every year in India. Most of these properties are purchased by Expat Indians, HNIs, Entrepreneurs, and High-ranking Government Officers who have surplus funds that they want to invest in lucrative opportunities to increase their net worth and to get substantial ROI.

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