Buying a Home, a Troublesome Task for Young Buyers

July 2, 2007	(Be the first to rate this story!)  Loading ...
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Nowadays, the feeling of buying a home brings headache than happiness to own an asset. Most young home buyers are avoiding buying residential property through home loan. The underlying reason being the prohibitive EMI which will come to almost 67% of monthly income an individual if he/she opts to get 100% home loan.

Generally, EMIs do not cross 50% of monthly income in India. On the other hand, most lenders in developed countries cap the EMI on home loans at around 25%, says Sanjay Verma, joint MD of Global Consultancy Firm Cushman & Wakefield.

The loan borrower will have to pay over 30% of the total cost of the house on his own. Young buyers hardly have that much savings. The average age of a home buyer had fallen 42 to 31 years. But, the trend has changed itself a little, as people save up good amount before they approach financial institutions or banks for housing loans.

The prices of houses in India are not likely to come down soon. Property prices especially residential units are expected to soar further as supply fails to stay in step with ongoing demand.

What ensures the demand for residential property to continue with the same pace is the increase in urban population along with increasing trend of living in nuclear families in India.

Average income is rising across households, as is consumerism. The number of households earning more than Rs 2 lakh has reached to 1.81 crore in 2006 from the mere 48 lakh in 1996, says the data showcased by Cris Infac.  The report further expects the number to rise to 3.22 crore by 2010.

There is a requirement for large investments and proper planning to meet the ongoing demand. According to a property survey, real estate in India will need an investment of Rs 2 lakh crore every year over the next five years.

News Published Under:   Real Estate India |

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