Post Covid19 - Rent or buy a house?

There is no denying that 2020 has put a damper on the plans of those who wanted their own place of residence, be it a purchased or a rented home. The second wave of the Coronavirus pandemic is making its way through the country and as more and more people fall victim to the virus, experts are predicting that things aren’t going to get better any time soon. What does this mean for people looking to rent or buy a new home? Fortunately, it doesn’t mean bad news. Prospective home buyers and those looking to lease a home are in for a never like before opportunity if they plan to rent or buy a home this year.

Since the lockdown, the rent on properties has seen a significant dip. In fact, in metro cities, the standard rental rate for residential properties has gone down by a whopping 25%. Real estate consultants have reported that they have never witnessed such a drastic drop in rental rates in such a short span of time. Most suburban rental homes have been sitting vacant since the commencement of the lockdown as their occupants have left for their native towns leaving those dependent on rental income in a lurch. This explains why property owners are offering their homes at low rental rates. If you are looking to rent a home in such a scenario, now would be a good time as you can find prime properties at relatively inexpensive or very affordable rates. While there might have been a cut in the rate of rental properties, there hasn’t been one in the standard rental deposit that must be given to the landlord at the time of occupancy. This could be the year for people looking to live in prime properties of metro cities to rent affordable homes. If the deposit is high, you can just acquire a personal loan. Find out how Finwisely can help you.

Low rental properties can be attractive but if you aren’t keen on moving every eleven months, perhaps a permanent home could suit your needs better.

If you are looking to purchase a home this year, it is recommended that you go for homes where immediate possession is available. Given the situation, a number of home buyers who have purchased homes that are under construction are facing indefinite delays. While the lockdown may have lifted, manual labour who chose to go back to their hometowns due to lack of work, are unlikely to return anytime soon. At this point, a home that is immediately available will be your best bet. Buying a home is obviously a serious matter and more often than not, home buyers tend to make compromises mostly for budgetary reasons. There couldn’t be a better time than now to buy your own home. While the process of acquiring a home loan has become a whole lot more stringent than before, the interest rates on home loans have come down to a record low.

The Reserve Bank of India brought down the repo rate on home loans, resulting in a remarkable fall of home loan interest rates to as low as 7%. This is a very significant rate considering only last year the interest rates for home loans started at 8.5%. This means if you avail of a loan of say ₹50 lakhs for a duration of 20 years, you are likely to pay a home loan installment over ₹43,000 per month. But with an interest as low as 7%, you would end up paying around ₹5,000 less than the actual amount. That would mean you would save around ₹60,000 per year on your home loan interest which over the years will save you over ₹10 lakhs in interest. That money can actually be used to fund a bigger house. Know more about easily acquiring home loans with Finewisely.

A low interest on home loans is not the only reason why now would be a good time to buy a new home. Due to the lockdown, residential real estate sales have been significantly low and as such, property developers are willing to reduce the prices of homes on sale. This means, if you have the opportunity to invest in a home, now would be a good time considering the drop in property prices.

Owning your own slice of heaven is a milestone in everyone’s lives. This pandemic might have slowed down the economy but you can cash in on this opportunity to achieve one of life’s most significant goals.

Want to know more about the home loan process? Get in touch with Finwisely to get your first consultation. No charge!

What can Finwisely do for you? From helping you compare and understand your options and recommending financial institutions that will best suit your needs to walking you through the home loan process, Finwisely can play an important role in your home buying decision. Finwisely is an end to end solution that understands your financial needs and gives you the personalised attention you deserve.