Sangli-Miraj Real Estate Guide - What time is right to buy my home?

Many a times a buying decision is not so easy. One has to look at his/ her finance, job security, savings, dependents, hobbies, responsibilities & you name it... there are thousand things we have to take care before we buy anything. But when we decide to buy, many people come with a question in their mind that what time is good to buy? Is it right time? Will prices fall further? What if prices fall?

Many are in different age groups, in different earning levels with different responsibilities. But if you are buying your 1sthome- write it down
Answer Is The Same that "It Is The Time" when you should buy your home.

Are you in your 20's?

Believe me buddy, you are in best phase of your life & I congratulate you because you are reading this article & have very serious attitude about your life & having an exceptional foresight. Buying your first home in first few years is a best move in your life to get stability. I know that you do lot of hoteling, You like new flashy phones, you like new trendy clothes, you like music. I know pizza bills, internet charges, your room rent, your petrol bills takes out much from your pocket & this is the time you should enjoy them.

But think about changing your decision about purchasing a car instead of a flat. See below calculations-

Value Your Own contribution (15%) Your approx EMI Monthly EMI
Car 12 Lakh 2.4 Lakh Approx 15,200=00 @ 11.25% for 7 years tenure 15,200=00
1 BHK Flat 17 Lakh Say 3.5 Lakh Approx 14,500 for Home Loan @ 10.25% for 15 Years 14,500=00
for home loan assistance- click here

Now, if you think that you are saving only 1000 for choosing Flat instead of Car, think about this.

Car

  • Will bring valuation of Say 6 Lakh after 5 years
  • May be expense of 2000/month for fuel, 9,000/year for insurance, 10,000/year for maintenance
  • Total out go of 43000 per annum. Total of 43,000 × 5 years = 2 Lakh
  • You Loose 8 Lakh

Flat

  • 24 Lakh after 5 years with 12% moderate rate hike
  • May be rental income starting from 4,000/ m to 6,000/ m after 5 years
  • Society charges, property taxes approx @300/m Total adjusted income after deducting property tax, maintenance 50,000 × 5 years = 6 Lakhs
  • You Gain 30 Lakh

If you don't need a car for your business travel or if you really don't need it, go for your Home First.
Above statistics will not only impress your "to- be- father- in- law" or your "to- be- spouse", but this brilliant move will move you extra few miles before your race of your Life starts.

Are you in your 30's?

May be you are single or may be you are not a single now & have a family. May be you are only earner of your family or your spouse also earns. When your kids go to that most popular school in your city, may be you already know that when only Rs40,000 fees are "not only Rs40,000" but an addition for school van, uniforms, ever vanishing pencils, erasers, gatherings, private tuitions. & yes! You should feel proud to be a responsible parent. Matter of fact, telling you stories already you know, that these expenses keep on rising when kids go to college, later to higher studies. You age slowly & your insurances, medical insurances demand more from you. It's the best time to have your home now because living cost goes on increasing till your kids become independents.

Are you in 40's or 50's?

Its always Good to do it "Now" than to do it later! I know that managing the finance was not so easy for you, or you never thought of having your own home till now, or may be you stayed with your parents in their home & now your brother/ sister is asking share of property. Any could be reason, but its now high time you should own your home now. Now you don't want to see that landlord asking for rent again.

Remember, if you are 40 now, you have 20 years to pay your home loan. If you are 50 now, you have only 10 years to payback.

Later You apply, Lesser you get Home Loan & "Earlier You Apply More Amount You Get as a Home Loan".

There are few options available with banks which allows you to pay till your 65 age, but why pay till that time if you could manage to payback earlier by starting investing earlier.

Why Prices of Flats Generally Do Not Fall Down Easily?

1 Don't feel fear of a bearish market or don't fear of prices falling down. Most of may have heard of a "Home Bubble" in US.

"I haven't seen so called Bubble Yet here in Sangli & Miraj where internal consumption occupies 90% market!"
(When US was struggling on Housing bubble, here in Sangli- Miraj people were making their investment Double every 3 years & prices never went back)

Unlike in United States, where people shift their home locations more often, where people treat real estate as a 'liquid asset'. We here in India are save more. Forget about housing bubble would ever happen here. Housing bubble was caused there, because people lost their jobs there, Banks had offered long term loans but people were not able to payback. So many were willing to sell, but very few were willing to buy as prices were dwindling day by day. We don't get loans here for 30- 35 years. Indians are hardcore investors. We have been taught by our parents to invest more & expend less. May be at worst time people will sell off their cars, ornaments but none will ever sell their house where they live. Remember, it's only an asset there, in India it's 'Real Estate'.

2 Real Estate is not perishable like vegetables. More you wait & then more you get reward. Flats may loose value because of its natural decay, but everyone know how people are happy in redevelopment of their apartments. Likewise land cannot be created as a an industrial product.

3 Generally well to do people only deals in this category, so if there is recession & if someone has not invested here like betting, waiting for extra few months really doesn't matter. If you are buying your 1st home, don't wait for next recession to take over. It may take next 20 years for that.

Why Prices of Flats Generally Tend to Rise Always?

1 McKinsey report shows that in 2030, 59 Crores Indians will live in cities & 70% of the India's population would be urbanized. Cities will be much Bigger, Taller & Dense. More young people will result in more independent families = more houses = More Demand means increased prices.

2 Naturally input costs rise gradually. It's a natural way of increasing price.

3 Like many of the developed countries where taxes are as high as 45- 47%, believe me, taxes here will still rise. There was no VAT or Service Tax few years back. In Sangli, only in 2011, registration duty was increased from 5% to 6%. (Before I complete this article, Service Tax is increased from 12.36% to 14%. This means 0.41% hike in Service Tax.) More Taxes = More Final Price.

4 People are becoming rich day & day! Hence they tend to buy more bigger, more luxurious & more costlier things. & think about this "What was your income 5 years back?" Probable half of what you earn now. You are not alone to do so, increased income increases demand & so increases prices also.

5 Day by day we like to upgrade everything. Today's flats are more spacious, have bigger windows, have more glossy flooring. Generally upgradation happens in specifications & this is one of the factor that costs goes up.

6 There will be more people who will have their 2nd flat, 3rd flat, 1st holiday home, 1st beach house. Demand will never fall & so would prices.

7 Dependency on farming will reduce, Job creation in cities will have to grow. Farmers with more money in their hand will like their kids study in bigger schools.

Early Decision is a Better Decision Than a Late Decision Than a never ever Decision

& if You are buying your Home
Time is Now!
wish you good luck!

regards,
Phadke Developers
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