There’s a famous saying, “Owning a home is a keystone of wealth, both financial affluence and emotional security”. Sadly, the youth in India don’t believe so. They don’t want to bear a heavy EMI burden, early in their career.
Today’s youth want to tour the World. They would rather visit 10 countries or invest in experiences, rather than buy a house. They would live in rented houses, rather than even bother buying a house. (The older generations would be shocked at such an approach).
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The youth don’t want 20-30% of their salaries to be spent on home loan EMIs. They would be tied-down with a home loan for several years, adding to risk in their lives. The youth want to enjoy job flexibility. This is the power to change jobs or tour countries without the attached burden of a home loan.
Take a look at this. Most apartments in Mumbai cost a Crore. An apartment in Pune would cost Rs 70-80 Lakhs. Houses in Hyderabad costs Rs 60-80 Lakhs.
If you take a home loan to buy an apartment in Mumbai, you end up with home loan EMIs of Rs 1 Lakh. It would be Rs 50,000 in Pune or Hyderabad.
Now, you could rent a place in Mumbai for Rs 35,000 to Rs 40,000; a place in Pune for around Rs 20,000 to Rs 25,000. There is a 3-4 times difference between rent and EMIs. So, if renting is 30% cheaper than home loan EMIs, then why would the youth ever buy a house? Then there are co-living spaces. You get to meet new people and participate in different social activities.
Getting a home loan from the bank involves paperwork, documentation and procedures. There is also legal documentation when buying the house. The title deed must be clear and marketable. Check sale deed and also encumbrance certificate to see if the property is debt-free.
Impose rental restrictions: Well, this is done in the US. People have no choice but to buy a house.
If home rent increases and home loan EMI goes down, it makes sense to buy a house. This rent to the EMI ratio is similar when it comes to owning a house. You also get tax benefits on owning a house. There is the Section 80C tax benefit on home loan EMIs up to Rs 1.5 Lakhs a year. You also get tax benefit on home loan interest up to Rs 2 Lakhs a year under Section 24. If renting a house is par with home loan EMIs, the youth would invest in a new home.
The home buying process needs to be transparent. Well, it should take just 30 days to buy a house. This is when the youth would flock to buy houses. Real estate firms must offer easy-to-understand mortgage packages, and incentivize home buyers to buy that house.
See Also: How To Buy A Flat?
Most youths buy things online using their mobile phones. Well, it would be great if youth can buy houses online. There are sites which offer 3D views of the house, to help make the purchasing decision. You get the feel of the real house which helps narrow down the choice. You could take the services of an online mortgage estimator, home loan EMI calculators, online loan approvals and even tools to check property rates.
See Also: Buy vs Rent a House
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