5 MinsAug 12, 2021
Mahesh and Sangeeta Vyas are both finance professionals with demanding jobs. They stay in Mumbai with Mahesh’s mother and seven-year-old son Vinay in a rented two-bedroom flat.
Given their understanding of financial markets, the couple had taken a conscious decision of not buying their own house, until now. It was not due to lack of money or income. Together the couple had enough earnings and banks were more than willing to offer loans. But their reasoning for not investing in residential property was this: The rent they paid was less than half of what the EMI would work out to for a house of a similar size in a similar locality. Hence, Mahesh and Sangeeta were happy to pay the rent and invest the money they had saved.
Then the pandemic struck, and both Mahesh and Sangeeta had to work from home. The lack of space became an issue. The couple had to constantly play a game of musical chairs to attend to calls and video conferences while still looking after Vinay and Mahesh's ageing mother.
That's when they decided to buy their own house. These were the factors they considered while taking the decision.
WFH (work from home) is the new normal: Even as vaccinations gather pace and the economy recovers, the Vyas' are convinced that the work model, in the future, is likely to be hybrid. They may have to go to their offices a couple of days a week for meetings, but in the foreseeable future, home is their office. This means both Mahesh and Sangeeta need adequate space to work comfortably. Their son will also need space to attend his online classes without disturbance.
Saturation in home prices: Housing prices in the mid-to-affordable housing range have plateaued across most cities and towns in India. Developers have a lot of unsold inventory and are willing to negotiate if they think the buyers are serious. As a market-savvy couple, both have realised that demand for new housing is slowly coming back, and it makes sense to them to buy before it peaks, driving prices higher.
[Also Read: Worried about your home loan eligibility? Here’s how you can ace it!]
Liquidity and concessions: In a bid to fuel demand, the Reserve Bank of India (RBI) has injected a lot of liquidity into the system. State governments are offering concessions in duties and developers giving freebies. This makes it a perfect time to buy. The tax concessions on the repayment of housing loans are an additional attraction. A housing loan in their joint names will entitle each of them to a deduction for home loan interest up to Rs 2 lakh each and principal repayment u/s 80C up to Rs 1.5 lakh each in their tax returns.
Attractive loan rates: Home loans are now available at attractive interest rates. Hence, this is a good opportunity to build long-term assets, and as smart finance professionals, the Vyas' wanted to take advantage of the opportunity.
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