A friend once asked his grandfather – ‘Dadaji, what is the one thing that you advice me to do once I start earning?’. His grandfather replied ‘Beta, you are smart so I don’t want to tell you what to do. However, I will tell you what I did – as soon as I started earning, I bought my first home. It was difficult but your dadi supported me and that home was a great place to bring up your father and his siblings and over time, our family has earned more than 100x what I paid for the house.’
So while times change, something’s thankfully don’t and one of them is buying your own home to live in as soon as you can. As Mrs. Renu Karnad Sood, MD of HDFC, said in December 16 “If you are going to live in a property, I think there is no time better than today”.
There is a lot of angst in our country about how real estate developers take advantage of their customers. However, with critical reasoning, we need to separate ‘real estate’ from ‘real estate developers’. As an analogy, while there may be corrupt/inefficient accountants, doctors or lawyers, the fact is that taxation/accountancy; medical services and law are vital sectors for our economy. Similarly, the general public and lawmakers needs to recognize the vital importance of real estate sector to job creation and wealth creation for the middle class and ensure that policies are framed in a manner which allow real estate sector to thrive, even as unscrupulous players are given appropriate punishment and support is given to the clean, credible players.
However, new policy reforms, introduced by our Hon’ble Prime Minister such, as RERA, Demonetization and GST have certainly paved the way for transparency, credibility and sustainable and long-term growth of the sector which is the second largest contributor to the employment in India after agriculture. But unfortunately, at the same time, misleading speculations and conflicting opinions have left the potential homebuyer and investor more confused than ever.
To dispel the ongoing myths, I urge the homebuyers to consider the following arguments before they make an opinion or decision.
1. Housing has unarguably created great wealth for every generation, one can reflect on how it made the previous generations feel secure and helped them meet large expenses.
2. Whenever someone is thinking about buying a home, people advise him/her to wait for the prices come down, however, it has never happened. In fact, those who wait have always ended up paying more due to price appreciation in major cities.
3. Over 75% of wealth of middle class Indians has been created because they bought their home early.
4. Real estate is one of the largest contributors to government revenues via stamp duty, property tax, service tax, VAT etc. So it is in the interest of the government to support growth of real estate sector.
Real estate is the second largest employer in the country after agriculture, which implies that it has massive implications on the country’s economic growth and stability. Apart from its contribution to the economy, there is a lot that real estate developers do to build and maintain the ecosystem. Real estate’s contribution to economic development and nation building as a whole has been a predominant factor in every country (US and UK are major examples of this). There is a strong belief that once the economic activity in India accelerates, real estate will grow parallel to its GDP.