Buying a Home: The Issue of Waiting Too Long
Today, many home buyers adopt ‘wait and watch’ strategy, which is a main reason why aspiring home buyers are not moving forward to purchase the home. The reasons could be many,why the home seekers are idle rather than getting their dream home. The most significant could be negative real estate markets information about the trends through different channels.
In today’s scenario, the Indian buyers are waiting for two things to happen-for property price to come significantly down, and the home loan interested to become lowest as possible.From these two factors, the property prices coming down is a major factor to make their purchasedecision pending.
There are also other reasons why people who long to own a home do not take the plunge.For example, they may be confused by conflicting objectives and are looking at whole issue of home buying from an investor’s perspective rather than the house owner’s perspectives. Such mind sets has resulted in people either waiting for the right entry point –the lowest point to which prices shall drop or worrying about the non-liquid nature of the property (in comparison with other liquid instruments such as stocks, gold, silver etc.)
Another reason for buyer paralysis could be the size of the home they want to buy. Every buyer want to buy large house for more facilities and to envy their friends and relatives. But, now a days, the average sizes of home has been reduced by the developers as the prices have gone up. Since the home beyond particular sizes are beyond their purchasing capacity, they wait till their savings increases enough to purchase the desired sized home.
For this kind of buyers who adopt ‘wait and watch’, a deeper understating of real estate market and options available to them can bring them closer to achieve their goal of home buying:
Waiting for home loan interest to come down:
Home loan rates are decided by state of the economy. Even banks cannot arbitrarily bring down the interest rates, without considering economic factors and RBI (Reserved Bank of India) rates. When the whole economy improves, the lending norms and rates generally improves. This is deepened on large macro factors of the economy, so the rates will not move that easily. You will be benefited by the reduced home loan interest rates if declared by the bank, if you have chosen for floating interest rate option in home loan, so anyway you are going to be benefitted from the home loan interest rate cut.
Waiting for Prices to come down:
In real estate price correction generally do not happen the most people imagine. Even if the price rates correction occurs, it might be only for particular cities- and especially the locations within the cities, where the supply is significantly higher than demand. If sales are taking places, but at
a slower rate, the prices are expected to be stagnant. If anybody wants to buy a property, they are safe enough in this stagnant price scenario, however low risk is involved in property purchase at this time. The home buying is a considered as a long term investment and in long run, it is believed that the property will not give you negative returns.
a slower rate, the prices are expected to be stagnant. If anybody wants to buy a property, they are safe enough in this stagnant price scenario, however low risk is involved in property purchase at this time. The home buying is a considered as a long term investment and in long run, it is believed that the property will not give you negative returns.
Waiting to Buy a Bigger Flat :
Size does matter- but not that much. If you are in position to buy a 3 BHK flat in a good location today, one can be assured that it will appreciate in value in future. Assuming your income to grow steadily as well, you will be able to upgrade to a bigger home in a few years. If you are planning for larger home, the prices of that property will also increase if it is in a good location and good property. So do not wait to buy a large house, you can anyway buy it in future.
Property as an investment :
Home purchasing and investment in property are two separate things as the goals are different for each. A home is a one thing we buy to live for and to get a secure place for our family. It is a place where we feel secure and we find peace with our loved ones. An investment property is something we buy to get good profit in future or to rent it our till then. Homeowners view their homes as source of stability and security, while investors see their holdings as tradable commodities.
Like all mind sets, the wait-and-watch strategy can become chronic one for no better reason than that it has become a habit. The decision to postpone the purchase of home, should not be on the basis of limited information, whereas it should solely on the basis of your goals and purpose. Otherwise you will put your dream home further and further out of reach. In short, if you want to buy a home, do not wait, go and purchase it. There is no right time than now, to buy a home for your family.
