Should I go ahead and buy the house that I had planned to purchase before the pandemic broke out? Or should I postpone my purchase until the economic outlook improves? The short answer to this question is that each one of us needs to assess one’s own financial capacity before taking on this liability. And if you do decide to undertake this tightrope walk, make sure you have a safety harness in place, as we shall explain.
Of course, there are risks in this economic environment of one’s income being lost or curtailed. But there are opportunities, too. Real estate prices have corrected by 20-30 per cent across the country over the past four-five years. Home loan rates are at a 15year low. The combination of low home prices and low home loan rates makes home purchase an attractive proposition at this point of time. At present, developers are not announcing any price cuts. But remember that they are facing a massive liquidity crunch. Hence, many of them are willing to negotiate on prices with serious buyers. They may not offer a straightforward discount on prices, but they are ready to throw in several freebies, like waiving the charges for clubhouse, parking lot, registration and GST fees, or they are willing to offer a free modular kitchen. All of these can amount to a discount of anywhere between 5-15 per cent of the cost of the house. The bottom line, however, is that you must have the necessary financial heft to make the purchase at this point of time.
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