Young professionals preferring to buy house early in their careers

HYDERABAD: Suresh Kumar, a 26-year old software engineer is a busy man. He joined a leading multinational company three years ago and is now looking out to ‘settle’ in his life. While few years ago settling in life, at Suresh’s age, meant getting married, Suresh thinks otherwise.

Before getting married, Suresh is determined to buy a house. “I want to first buy a house and then only think of tying the knot. Buying a house before marriage is a better option as it will give me a semblance of security,” he says. And Suresh is not the only young professional with such ideas. Few decades ago, buying a house was the final step that a person would take to settle in his life. Most often, one would buy a house at the fag end of his career with the money that he accumulated during his log working life. This would give a modicum of security to a person in his penultimate years, or so earlier generations thought.

With the rise of new economy and with its inherent volatility, the situation is different now and younger generation prefers to own a house very early in their careers. “Though we are well paid, we do not have the job security which our earlier generations enjoyed. Without the security provisions like retirement benefits and stable pension, it is too risky for a young professional to wait till his retirement to buy a house,” Siddhartha M., an IT professional explains.

Apart from this, with sky rocketing house rentals, it also makes sense for a professional to purchase a house with loan and clear it with monthly instalments. This way, one can own a piece of property with almost similar cost that one would shell out if he stays in a rented house, he adds.

While these reasons are quite valid, buying a house early in the career can also have an investment value.

“In spite of economic downturn, the real estate market is on a stable upward trajectory. While financial instruments like shares and bonds can loose their sheen, buying a property will not only ensure that the value of your investment remains stable, it will also give a decent return,” Hari Krishna, an investment banker says.

With the ever booming population, the share of young professionals in the total population is set to rise in the coming decades and this means that real estate sector is in for a long term growth, Hari Krishna points out. This, he says, is because all these professionals will try to settle and own a house. In case a professional is forced to move out of the city because of his job requirements, he can either rent his house or sell it for a higher price. Both of these options are lucrative, Hari Krishna points.

The article was published in “Property Plus’ supplement of The Hindu on May 05, 2012.

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