K. ARAVIND
Reports indicate that young people are less likely to invest in real estate. One study suggests that most people are not ready to bear the burden of paying a relatively large monthly as installment to buy a home at an early age.
Young careerists are not ready to limit their career in any particular city. As they aspire to move from city to city, these youngsters are reluctant to buy a home and tend to prefer rental accommodation. That’s the main reason for this lack of interest in real estate as an investment option.
Most homebuyers in the 1990s were between 45 and 55 years old. By 2000, it had dropped to between 35 years and 45 years. The number of 25-35 year-olds buying a house increased during 2009-10. This is due to the increased availability of home loans.
At the same time, this trend has now changed. About 36% of homebuyers are aged between 35 years and 45 years. People aged between 25 and 35 are less and less interested in buying a home early in their career. Instead of investing in real estate, these people opt for other investments. People of this age are not interested in making big investments at one go.
Until the late nineties, the age of those who bought or built a house was between 45 years and 55 years. At that time, people were more interested in building a house with the money they had earned over the years. The method of building a house on credit was not very popular at that time. Most people buy a home just before retirement. This is also due to the fact that banks at that time were reluctant to lend large sums. But this trend later changed completely.
The availability of home loans has increased by 2000s. It is easier for young people with high salaries to get loans. This has led to an increase in the number of people in the age group of 35 years to 45 years building or buying houses. This trend was further strengthened by the fact that home loans can help save on taxes. The increase in the number of home loan borrowers is due to the fact that tax relief on repayment of home loans up to Rs. 3.5 lakh in capital and interest items is available.
Until 2015-16, there was an increase in the number of people in the 25 years to 35 years age group taking out home loans. But then this changed suddenly. This is one of the main reasons for the change in the attitude of young people. Young people are less interested in investing in real estate. Earlier, mutual funds were seen as a high-risk investment. But today this attitude has changed. The trend of investing in mutual funds from the very beginning of one’s career through methods like Systematic Investment Plan (SIP) is slowly taking root among the youth.
