It is no big secret that second-hand houses too enjoy incredible popularity, just as used or pre owned cars. Even if new housing projects are announced, people prefer second-hand houses as the construction would take ages to complete and also because many aren’t interested in spending a huge amount of money for a brand new house. Affordable rates are the major factor that draws customers to the ‘pre-owned’ market. A brand new house that looks exactly like the second-hand house would at least cost double. It indeed is profitable to buy a second-hand house than to spend an exorbitant amount of money for a new house that almost has the same amenities. It is not a small thing that the customer gets 20 - 35% discount for pre-owned houses.
Even if there is a scope for bargaining when a brand new house is purchased, there is a limit for it as the value of the property is ultimately determined by the builder. Meanwhile, the customer can avail maximum discount in the case of pre-owned or second-hand houses. Here, it is the customer and not the owner who has the final say on the price. This is one of the main factors that make the second-hand market desirable. Interestingly, houses that haven’t been occupied even for a day are available to be sold in the second market. These are houses bought by spending high prices, hoping to resell them on a profitable rate. However, they might not be able to sell it at a profitable rate, as they had hoped. Disappointed, they would then be forced to sell these houses in the second-hand market. Even though these houses are technically second-hand, they are ‘brand new’ with no one ever lived in them. In such cases, the most amazing advantage of the buyer is that they would be the first residents of that house.
Points to note
Despite these advantages, one must be careful while purchasing a second-hand house. The most important thing is to ensure that there aren’t any liabilities associated with the land or the structure. Make sure that the property is not mired in legal issues. Another important factor to be noted is the sturdiness of the structure. Expert opinion must be sought to know whether the roof and the walls have been built sturdy using high-quality materials. Inspections must be done to see whether there are any leakages. In the case of apartments, it is not enough to ensure the sturdiness of only the unit that the buyer intends to purchase. The sturdiness and quality of the rest of the units too should be ensured.
Banks and financial agencies provide housing loans to purchase second-hand houses. However, it won’t be as easy in the case of a brand new house. The buyer should communicate the terms and conditions with the agency from where you avail the loans. Through observation and enquiries, make sure that the structure stands in an area that isn’t flood-prone or doesn’t have any issues related to waste disposal. Real estate experts warn that the present situation is unfavourable for buying a new property or building, even if the customer isn’t interested in purchasing a second-hand house.
» The price of land isn’t showing an unfavourable surge as before.
» The earning capacity of salaried people has gone up as many relaxations in income tax have been announced.
» Banks and financial agencies have lowered the interest rate of home loans. In fact, the interest rates are at an all time low.
The demand for real estate is assumed to soar once the pandemic begins to subside. The value of land and the interest rates of home loans too are likely to go up in the post Covid scenario. Moreover, it is estimated that the housing projects that have been envisioned in various parts of the state and the ones that are already under construction would only meet a fraction of what would be actually required during that time. Huge investments are expected to be made in the real estate market in Kerala as soon as the Covid crisis gets better. Experts predict that most of the investments would be made in Kochi and Thiruvananthapuram regions. Meanwhile, the builders assume that there would be a favourable demand for housing projects in Kottayam, Thrissur, Palakkad, Kozhikode and Kannur districts.
Earlier, non-resident Indians or expatriates were the ones who mostly bought apartments and flats as an investment. However, it is predicted that local demand too would go up in the near future. It is estimated that the proportion of expatriates and the people in the locality buying apartment units would be 50:50. Studies have shown that flats and villas are mostly purchased by people between the age group of 30 – 38. Earlier, the average age of buyers who preferred flats and villas was 50 – 58. An average age difference of 20 years has been noted here.
A significant increase in income is one of the main reasons why youngsters have begun investing in real estate. Increments and bonuses that were earlier earned only when one gets promoted to some of the top posts are now available for the newbies too. Moreover, youngsters apparently make use of the multitude of saving options that are available in the modern age. The number of financial agencies, including banks, that give housing loans has gone up. Most importantly, the criteria for availing of home loans have been eased. Besides, these loans are swiftly approved by the institutions without any lag.
The young generation is eager to buy a house of their own as the rental rates have soared and due to a lack of availability of homes with desired facilities. The fluctuations in the share market too indicate a positive trend of profitable investment in real estate. It is quite clear that if you nurture a dream of owning your own house, then it is better to try for it as early and eagerly as possible. Experts say that the current favourable situation, in both the first hand and second-hand markets, might not last long. Time is an important factor that determines one’s profit or loss in the real estate market.