Should I buy or rent a house in 2021? What makes 2021 a home-buyer's year?
The pandemic has made people rethink their investment decisions because every option has gone through drastic changes. While most industries went through a storm, the returns on savings options went down significantly. An industry that has also been affected greatly is real estate.
People with steady jobs, who have been renting so far, now have the option of buying open to them because the prices have gone down significantly, mainly because industries have shut down and there have been job losses. Many people who are employed are also now working from home since the breakout of the COVID-19 pandemic and there's no estimate on how long before they are called back to office. Those who had formerly rented homes are vacating to return to their hometowns or for other personal reasons. Whereas for others, a home also doubles up as office in the current atmosphere thereby making the decision of choosing a home either to buy or rent a very essential one.
Not a lot of people are keen on buying unless they are assured of a steady cash flow. The simple economy of demand and supply means that there are homes to buy, but the purchaser pool is slowly drying up because people lack funds.
Interest rates on EMIs have also gone down, so obtaining a home loan is no longer a mammoth task. Paying back the instalments is also more manageable now, and a person can do so with just paying a little less than half of their monthly salary towards their home loan, which leaves them with funds for other kinds of investments.
For any individual who has enough savings to fund 30% of the cost of a new home, buying is a good option. This, of course, comes with the rider of a steady job, which is not an easy guarantee to undertake in the pandemic period. The saving grace is that most people are working from home, which means they are saving on rent, having the luxury of working from their native states and homes, also saving on subsidiary expenditures like travel. To add to this, stamp duties have been brought down by many states, making it possible for a middle or upper-middle-class person to buy a house. If a person is buying now, they can rest assured of the lowest ever prices that they will get.
However, renting also has its perks, leaving a lot of a person’s money free for other investments. The returns are greater, and one does not end up paying a massive chunk of their money towards EMI. It is an excellent option if one is not hell-bent on taking pride in owning a house.
However, buying a home is in itself an investment. The price of a house bought doubles automatically, even quadruples in a span of 10-15 years, depending on the location and real estate rates. Thus, 2021 is the best year to buy a home if one has the financial yardsticks right.
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