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Urgency To Buy Home Is Much More In Cities Like Hyderabad, Indore, Kolkata




urgency to buy home

They say, “Home is where the heart is,” Apparently, home is also where Hyderabad is, or for that matter, Indore or Kolkata is! Why do we say this? Well, according to a recent survey conducted by the Times Group, the cities of Hyderabad, Indore and Kolkata are ruling the Urgency-to-Buy-Home List, making them the most sought after real estate havens for aspiring home-buyers.

As the survey suggests, when it comes down to making property investment(s), a choice out of these three is the most profitable. Purchasing property in any of these cities is undoubtedly a better decision than renting, even if you have to pay an extra amount, thanks to a favorable EMI vs. Rent ratio. Contradictorily, cities like Mumbai, Pune, and Bangalore, have sky-high real estate rates and renting looks like the wise thing to do any day!

The primary factory in deciding whether to buy or rent is the property cost as compared with the rental value. The ArthaYantra Buy Vs. Rent Report 2017 shows the comparison between the property prices with rental values for 1,000 sq. ft., ready to occupy house across the top twelve cities.

Courtesy: ArthaYantra Buy Vs. Rent Report 2017

Courtesy: ArthaYantra Buy Vs. Rent Report 2017

The cities of Delhi-NCR, Mumbai & Chennai are the costliest in terms of property purchase. Owing to the increasing inventory levels in these cities, the supply that is available is practically unaffordable for many, making people choose the option of renting over buying. Indore, on the other hand, scored the highest rent to buy ratio, second to Hyderabad that remains at spot one.

Buying a house is no joke; it comes with its own share of calculated risks, especially those of overpayment and illiquidity.

Your home is essentially a real asset, which means there is no assurance that the price you paid to buy it remains the same few years down the line when you try to sell it; worst case scenario, the price drops too low and you end up making a profitless sale and a futile investment. Another common occurrence is getting stuck in the middle of a bidding war, and unfortunately making an overpayment. People ending up with mortgages higher than the actual value of their homes is no news to the real estate market after all! This doubt of whether the price of your property will appreciate or depreciate by the time you wish to sell it off is always there.

Secondly, houses are illiquid investments. Once the down payment is made, it cannot be easily utilized for any other purpose. But if you are fortunate enough to have a comfortable income and manage to remain debt-free along with having a provision incase any financial emergency arises, the issue of illiquidity shouldn’t bother you much.

Another important factor to consider is whether you would be able to offset your closing costs. For a rational home-buyer, there is no sense in buying a place to call your own and contracting the required purchase fees and other costs if you do not plan to live in the property long enough.

It’s always better to start a saving goal and put money in right mutual funds such that the money keeps growing and you can cash out any time whenever you are ready with your decision. Here is one such tool “Guided Portfolios

Good luck!

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