Buying a house is certainly the biggest investment for every individual in all likelihood. Thus, it is essential to take the decision of buying a home after careful analysis of your needs as well as financial conditions. Financial position varies from person to person and hence, a certain age cannot be termed as ideal for every prospective buyer. However, due to attractive salary and sound career growth, individuals are taking the decision of buying their dream home quite early in their life. Today, younger generation looks forward to owe their home right from the age of late twenties to early thirties. The average age of people buying their first home has reduced from 42 to 31 years in the last decade. The home buyers’ perspectives have changed considerably and there are certain factors that have led to this change. Some of the vital factors that have influence people to buy home early include:
Rising Cost of Properties
The trend of property price in the last ten years clearly indicates that price of property rise steadily and sometimes even rapidly. The property price rises faster than the inflation rate and significantly faster than the increase in your income. Thus, if the buyers do not plan it early, then they might end up paying exorbitant price for small size property compared to what they will pay today.
Home Loan Has Become Easier to Avail
Due to good salary and high income, more and more people have move into high-income bracket and they easily qualify for the home loans. Besides, today several private and nationalised banks offer home loans on attractive interest rate. This has further resulted in stiff competition between the banks that offer more flexibility and benefits to the borrowers in order to lure them. To attract borrowers, banks have even reduced the processing time and fees and borrowers can choose loan tenure from five to thirty years as per their convenience. Thus, with easy home loan option and with 90% of the property cost being financed by the bank, buying home at young age has become possible.
Home Rents Increase Every Year
In the last few years the home rentals have tremendously increased especially in the metropolitan and big cities. The fact is that the rent has increased more than the property cost and every year the rent is further increased by 10-12%. Thus, it is better and wiser to pay EMI installments towards the bank property loan than to pay high-rentals. People availing home loan at young age will get off the loan in their mid-age, thereby getting time to save for their old age.
In order to encourage home buying initiative of people, government is allowing tax breaks of Rs 150,000 on loan interest and up to Rs 100000 on loan principal amount. With most of the youngsters availing high-salaried jobs, they come in the tax-racket straight away. Thus, by availing property loans from the bank, they will end up saving good amount of money on tax.
Home is No More a One-Time Investment
During their early days people can buy a flat according to their budget, as this is not just the end. With growing family and increasing salary people can definitely think of buying another home depending upon their requirements. The growing flat culture has allowed people to easily sell off their current flat and purchase a new one as per their current need.