The Hindu Business Line : Investing in a dream home

Investment is the buzzword for youngsters today, what with a whole lot of options available such as stocks, real estate, mutual funds and insurance to take care of unforeseen circumstances.Peer pressure, future security, surplus disposable money, double-income nuclear families etc play a crucial role in accelerating this trend. Interestingly, more and more people are now investing in homes at places where they work and not in towns/cities where they come from.

Says 32-year-old Ravi Sadangi, a senior executive with HSBC, Hyderabad: "People are now investing mainly in real estate, because there are more nuclear families and therefore the desire to own a home is more pronounced at one's place of work. For instance, I have gone in for a home loan and picked up an apartment here, though I belong to Orissa because my work demands that I live here."

Another senior bank manager says that in 2002-03, the interest rate on home loans was about 12-14 per cent. In 2004, it was around 7-7.5 per cent, and has now gone up to over 10 per cent.

Country Wide Financial Team Lead Preeti Punjabi has taken a home loan jointly with her husband Vishal Puri in Hyderabad, where they work and not in Delhi where they belong; "what is the use of having a home if you can't live in it," she asks.

"Our salaries are Rs 5 lakh each and we have taken a loan for 15 years. We have to curb on our expenditure now. Of course, we can't cut down on what we send to our parents. It needs a little bit of planning. Earlier if we were travelling by flights, now we travel by train. And then our salaries will go up over a period of time, whereas the EMI will remain the same. In the long run, it will be good for us," she adds.

They don't plan to move out of Hyderabad currently; but if they do, they will dispose this property and buy something wherever they go.

Thirty-seven-year-old Rajeev Menon, Branch Head, HSBC, Coimbatore, invested in an apartment in Bangalore a few years ago when he was working at Hyderabad. He says property prices in Bangalore were "interesting then and the growth also seemed much better". He picked up his flat at Rs 1,170 per sq ft. "Now the rates are around Rs 3,000 per sq ft. I don't plan to sell it now. I have rented it out to someone and there are absolutely no hassles."

Of course, there are those like D. Ramanathan, working with a mutual fund company in Mumbai, who bought an apartment in Chennai while he was posted there. Now in Mumbai, he doesn't quite feel like selling it as he belongs to Chennai. "It's purely sentimental. This is our first investment and we have people there to look after the property; so there are no issues," he says.

According to a senior Standard Chartered Bank official, the investment craze is mainly due to the IT boom which has brought along with it increased salaries, exposure to global culture, desire to lead a better quality of life, good marketing strategies, growing consumerism and, of course, a wealth of easily accessible and reliable information that was earlier lacking.

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