Home buying is an ambition most Indians harbour and people subconsciously design their ideal house until they achieve this. There are many factors that play a role in buying a house, and age is one of them. While the concept of one size fits all does not exist when it comes to determining the age for buying a house, the 10-year range actually tells you if you are prepared for owning a home. The ideal age for home buying is the one that is a combination of personal, financial, and market conditions. This guide will focus on aspects as to why the period between 35-45 years is the right time to buy a house with an aim to benefit readers, especially in this age group.
Why is 35 to 45 years the right time to invest in a house?
Often referred to as the Goldilocks state, people are in their best phase when they are between 35 to 45 years. This is a balanced state—financial stability, career maturity, and personal readiness that helps in making and executing significant decisions with long-term implications such as buying a house. According to a Knight Frank India report, till July 2024, with 33,946 property registrations in Mumbai, the YTD 2024 for the age group 30-45 years is 40%.
Career direction
This is the time when you have great visibility of your career path. Mostly, people are well-settled in their career by now, which helps them with clarity on what the future will be in terms of relocation, earning potential, etc. Generally, most people tend to move to different cities or countries before they hit 40, as after this it’s difficult to adjust to new surroundings, learn new languages, etc. At this age, if you buy a house, it’s mostly for keeps. Once you know well where you will be staying for the rest of your life, buying a house there makes sense. “I had a 1 BHK in my hometown in Sangli that fetched rent of around Rs 4,000 per month. I was staying in a rented house in Pune while paying a rent of Rs 30,000. While for 2 years, the rent was according to the market rate, the third year saw a hike to Rs 33,000, and I was also asked to vacate the house once the 11 months of the third year were completed. At that time, my boss advised me on the importance of investing in a property where I am planning to settle. I sold the property in my village and invested in a 2.5 BHK closer to my workplace and started servicing my EMIs instead of the monthly rent that I was paying,” says V V Caesar, a resident of Pune.
Personal readiness
At 35-45 years, people have clarity on their lifestyle choices that would have evolved with experience and age. Although it’s a personal choice, a large part of people in this age group are married with children. The preferences, including ideal home configurations, locations, and desirable developers, may change because of the impact of the family around you. “I bought my first house when I was 26 years old in a standalone building in Navi Mumbai. After marriage and kids, with the family having grown, security, amenities, connectivity to school and work, etc., came into play, and we decided to invest in a bigger property in a gated community when I was 41 years old. We could take this decision because of the savings that we had till now and double income (spouse) contributing to the purchase,” says Rajesh KM.
Financial stability
By this stage, people have a steady source of income and better credit standing. Also, they can easily estimate what their future earning potential will be. This gives a sense of understanding regarding the commitments that a person can make with respect to a home loan after spending on basic necessities for everyday life, his family, etc. Also, a down payment for a property can be better managed with the savings and investments done over the years. With neither too low corpus nor too long a time for paying the loan, the mortgage terms that a person can avail of in this time period will be much better than what a person in his 20s or 50s can avail of. Take the case of NRIs Karan Singh and his wife Dia Singh (both 46 years old), who plan to shift base from the USA to their homeland. “Having stayed in the US for over 15 years, we have decided to move back to be with our parents. My first step in this direction was to invest in a property closer to both our parents’ houses. After some property scouting, we have booked an under-construction property in Bangalore. With payments aligned with the stage of construction, the payment for the same will be easier to handle.”
10 things to remember when investing in property for 35-45 age group
Follow financial discipline
Firstly, be ready to be financially disciplined and make sacrifices. Plan a contingency fund that has a minimum of six months of salary saved in case of a job loss because of market conditions.
Focus on savings
- Save a part of your salary to be used post-retirement.
- You should also have allocated savings for addressing any health issues for which there may be no medical insurance taken or which don’t fall under that ambit—for instance, dental treatment (which rarely falls under medical insurance).
- Focus on allocating a part of the salary that will cover cost of living.
Estimate property budget and down payment that you should pay
Finally, of the chunk that is remaining that you are ready to invest in a property, estimate the budget for your property -till which you can that you can stretch to. Know that while for 80% of the property’s value you can take a home loan, the 20% has to be paid as down payment at the time of booking by you. There will be additional charges to be considered such as stamp duty and registration charges, other taxes and the down payment. Thane resident Sangamitra Ghosh bought her first house in her mid-30s. Like many others, she had to stretch the budget to get hold of her dream home. “When I had bought the property, I had to service two loans –one a home loan for the property and the second a personal loan that I had taken in for paying the down payment. The only thing I was scared of was that I didn’t have a safety net to fall back on in case of any unfavourable market behaviour. However, I decided to stick to my decision of going with the property purchase while being prepared for the worst case scenario. I had put my domain knowledge to use and it proved to be a good decision as a few months later the property prices saw a surge. While I timed the market and followed my instinct, not everyone will be lucky. So, it is always a good idea to be mentally prepared on what can be done if things don’t go as per plan,” she said.
Loan tenure
Home loan is something that most people depend on while buying a house. A home loan tenure is the longest when you start young and gradually decreases as age increases.
So, for someone who buys a home at 26 years – may get a longer duration to settle their EMI-up to 30 years with shorter EMIs and larger chunk of home loan (of course it is also based on their income level). For someone who is around 36 years- they get a comparatively shorter period for a home loan and for someone who may be 56 years would get a home loan that may be less in amount and less in tenure too- 10-15 years.
Larger down payment and prepayment
It is recommended for people in the 35-45 years category to opt for a larger down payment. In this way, their responsibility towards home loan will be lesser. They can further reduce the home loan amount by opting for prepayment whenever they can. Most people use a major part of the bonus that they get in prepayment that helps close their loan faster.
Other costs involved during property purchase
Note that the property cost involves many other costs that have to be budgeted, such as stamp duty and registration cost, TDS, home loan servicing costs, GST in the case of under-construction properties, maintenance charges, and annual property tax. Additionally, if you are purchasing the property through a broker, you would also have to pay a brokerage fee. You may also need to include the lawyer’s fee, whose help you would need for due diligence on the project you are investing in.
Tax rebate
Be aware of any tax rebate that you can avail of, which will help you save money on your property purchase. For instance, some states like Maharashtra offer a rebate on stamp duty to women home buyers.
Take sound decisions
Stay away from emotional decisions while registering the property. For instance, if you register the property you are buying in your parents’ name, your siblings automatically become legal heirs to the property.
Location friendly property
Choose the location and configuration that is favourable to all family members and has access to all basic facilities, including hospitals, schools, entertainment options, etc.
Due diligence is must
Do thorough due diligence on the project before you invest in it. Always opt for a reputed developer when you are investing in a property—be it under construction, ready-to-move-in, or resale. While in the first case, a reputed developer gives you the confidence of finishing and handing over the project on time, in the second and third cases, the construction quality and maintenance of a reputed developer is the factor that plays a big role. Want to know how to find a reputed developer? Do check this guide on Housing News.
Why is home-buying between 35-45 years risky?
While this decade is considered to be prime for home-buying and constitutes the most population investing in a house in India, there is also some amount of risk involved when you proceed with home buying in this age group. This is the time when you have the most number of dependents—newborns or small children and aging parents—unlike in your 20s or 50s.
It is recommended to be prepared for uncertainties. While people generally see only the obvious, prepare ‘Plan A’ and execute it, what is missed is the not-so-obvious and thus a ‘Plan B’ is never on the cards. “We had purchased a 2 BHK in Jalvayu Vihar in Powai just before Covid-19 hit. We stayed in that house only for 6 months as my husband lost his job and was seeking one for almost a year and a half after that. To manage home expenses, the education of two children, and the EMI for the lavish house that we bought with only my salary was difficult, so we took the call of moving into a small rented apartment and putting our property on rent,” says Simran Kapoor (name changed).
Housing.com POV
The 35-45 year age group is when you have ticked career planning, expanding your family, and started on your financial planning journey as well, with more than 20 years of work life remaining. This is a golden period to invest in a property so that you can reap the benefits of it now and in the future. However, given that this is also the time period when you have money, health and time, do not overcommit to real estate alone.
FAQs
How does having a dual income impact home buying decisions during the 35-45 years range?
A dual income enhances purchasing power thus helping you buy a property that is desirable. Also, it helps in managing finances, making a homeownership journey comfortable.
What is the age of the property that you should consider to purchase if looking at investment between 35-45 years?
Check properties that are upto 10 years while investing in a resale flat.
What is the most preferred category of properties for people investing between 35-45 years?
Reports suggest that people in this age category look at the semi-luxury and luxury category when investing as this is mostly for personal use.
What is very important when you are doing financial planning to buy a house?
Contingency planning is critical when you are doing financial planning to buy a house.
Why should you not delay your home buying program after 45 years of age?
The older you grow, the loan taking capacity reduced and also the tenure will be of around 10- 15 years. To avail of time to pay your home loan for a longer tenure, its advisable to start young.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
