Buying a Home during or after the Pandemic: A SEO Optimized Guide
During and after the pandemic, the decision to purchase a home can be influenced by a multitude of factors, ranging from market stability to personal security. This article aims to provide a comprehensive guide on whether it is better to buy a house during the pandemic or a year after things settle, especially considering the current low inventory.
Considerations for Buying a Home During the Pandemic
The decision to buy a home during the pandemic hinges on several key factors. One major consideration is whether the market has stabilized. If you are purchasing your first home, it might be wiser to wait until the market stabilizes, as prices could be lower and you might be stuck in negative equity for years. Alternatively, if you are downsizing or moving to a smaller property where house prices are currently inflated by a similar amount, it might be sensible to move to a cheaper property during times of high prices. Conversely, if you are moving to a larger or more expensive property, the extra cost may be significantly higher, making it less advisable to purchase during the pandemic.
Experienced Investor Insights
Personal experiences, like those shared by experienced investors, can provide valuable insights. For example, purchasing a house during a market crash can be financially advantageous. During the late 80s and early 90s property crash in the UK, a flat sold for £15,000 less than its pre-crash value (about a 20% reduction). On the other hand, a new construction house was purchased for £40,000 more than pre-crash values due to a market downturn leading to a quick purchase without a chain. This experience highlights the importance of timing and market conditions in making a purchase.
Financial Considerations
In terms of financial considerations, it's crucial to look at interest rates and property undervaluation. With the Reserve Bank of India (RBI) offering low interest rates, it might prove beneficial to buy now, as the prices in urban areas and states most affected by the pandemic might be undervalued. This undervaluation could benefit any long-term investment strategy. Additionally, buying a home offers a sense of security, which can be particularly important during uncertain times, as property remains an asset that may be easier to sell in the future. Furthermore, there are government interest subvention schemes available to those with incomes below 18 lakhs in India, which could be a significant advantage for current buyers.
Reasons to Postpone a Home Purchase until After the Pandemic
While buying a home during the pandemic has its benefits, there are also compelling reasons to wait until after the pandemic settles. Firstly, the constantly changing market sentiment and current health situation can harm the value of property purchased at present. Secondly, on-site visits, discussions, and documentation processes are more challenging during the pandemic. Thirdly, true valuations cannot be accurately arrived at due to the uncertainty of the future. Lastly, if you are purchasing a property under construction, ensure that you are aware of the extensions in RERA (Real Estate Regulatory Authority) implementation deadlines, which have been extended and could potentially be extended for up to a year. If your income is not stable, it is advisable to wait until you are in a more secure financial position to purchase a home, as the current economic uncertainty requires meeting essential needs.
Conclusion
When deciding whether to buy a home during or after the pandemic, it's essential to consider your personal circumstances, financial stability, and the current market conditions. This article aims to provide a balanced perspective, backed by personal experiences and financial insights. Making an informed decision can lead to a more secure and stable future.