Source: Economic Times

Youngsters shun realty as job losses increase
15 Mar 2009, 1049 hrs IST, Raja Awasthi & Neha Dewan, ET Bure


NEW DELHI: Guess what correction in the real estate market has done to the purchaser's age? It has pushed up the purchasers' age profile. During the boom,

the average age of the er had dropped to as low as the mid-20 s. But with sentiments not perking up, this segment too has witnessed a sharp drop in ing capacity and has pushed up the average age once again in the 35 plus age bracket.

SundayET did a thorough ground research and spoke to developers and bankers across the country as well as industry experts who agreed that there has been a significant change in the er profile in the last few months.

Says Navin M Raheja, CMD, Raheja Developers: "The young executives are now actually apprehensive about their jobs and future course of actions. They are in dilemma whether to invest now or not. Earlier, everyone used to get loans easily. Executives of MNCs are facing problems getting their loans approved as banks have really become strict, selective and are financing on the strength of the projects after thorough due diligence. Even if one gets a loan, it's the repaying capacity which makes one think twice and discourage young home ers from investing in property."

That's natural since low market sentiments, job insecurity coupled with a considerable stress on limited savings makes young customers shy away from home loans. Even people from the IT/ITeS industry who formed a major chunk of young home loan ers earlier are now significantly affected by the turmoil in global markets.

Rohtas Goel, CMD, Omaxe Group, is of the view that there is a distinct demarcation that can be seen in the er profile. "Mostly ers of affordable homes belong to middle-level working class of age group 27 years to 35 years while ers of luxurious homes belong to higher management working class or those who want to park-in their money for better returns starting from the age of 40," he says.

Many in the industry say that constant property appreciation in last three to five years and easy bank finance which went upto 85-90 % was earlier attracting young ers to invest in real estate. However, now with a reduction in property value, banks are now also expecting higher er committment by restricting lending to only 70-75 % of the total value. This is also a major reason why young ers are avoiding the market.

Says Rajiv Sahni, Partner Infrastructure & Real Estate Practice, Ernst & Young: "These factors put a direct strain on one's financial capacity, hence there is a reduced interest from career-starters to part with their marginal savings on real estate.





Anshuman Magazine, CMD, CB Richard Ellis South Asia agrees that a lot of youngsters will now not be able to afford housing easily due to the state


of the economy. A postponement of ing decisions in the short-term by this segment is thus expected. In fact the downturn in the real estate sector is visible as far as the home loan market goes. The home loan segment according to industry estimates, has witnessed a drop in offtake.

Many private sector banks across the board also confirmed that they have witnessed a considerable decrease in the number of queries from people seeking home loans in last few quarters. Says Sushil Muhnot, executive director, personal banking, IDBI, "Only people who are well-settled and who are getting a right price are coming forward for housing loans. That segment is mostly in the mid-30 s bracket."

AGE FACTOR

Sharp drop in ing capacity has pushed up average age once again in 35 plus bracket

IT/ITeS employees that earlier formed a major chunk of young home ers are now affected by turmoil in global markets

During the boom, average age of home er had dropped to as low as mid-20 s

Stress on limited savings is making young customers shy away from home loan

="http://economictimes.indiatimes.com/quickieslist/4207320.cms"]http://economictimes.indiatimes.com/quickieslist/4207320.cms
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  • Originally Posted by Nataraajg007
    Source: Economic Times

    Youngsters shun realty as job losses increase
    15 Mar 2009, 1049 hrs IST, Raja Awasthi & Neha Dewan, ET Bure


    NEW DELHI: Guess what correction in the real estate market has done to the purchaser's age? It has pushed up the purchasers' age profile. During the boom,

    the average age of the er had dropped to as low as the mid-20 s. But with sentiments not perking up, this segment too has witnessed a sharp drop in ing capacity and has pushed up the average age once again in the 35 plus age bracket.

    SundayET did a thorough ground research and spoke to developers and bankers across the country as well as industry experts who agreed that there has been a significant change in the er profile in the last few months.

    Says Navin M Raheja, CMD, Raheja Developers: "The young executives are now actually apprehensive about their jobs and future course of actions. They are in dilemma whether to invest now or not. Earlier, everyone used to get loans easily. Executives of MNCs are facing problems getting their loans approved as banks have really become strict, selective and are financing on the strength of the projects after thorough due diligence. Even if one gets a loan, it's the repaying capacity which makes one think twice and discourage young home ers from investing in property."

    That's natural since low market sentiments, job insecurity coupled with a considerable stress on limited savings makes young customers shy away from home loans. Even people from the IT/ITeS industry who formed a major chunk of young home loan ers earlier are now significantly affected by the turmoil in global markets.

    Rohtas Goel, CMD, Omaxe Group, is of the view that there is a distinct demarcation that can be seen in the er profile. "Mostly ers of affordable homes belong to middle-level working class of age group 27 years to 35 years while ers of luxurious homes belong to higher management working class or those who want to park-in their money for better returns starting from the age of 40," he says.

    Many in the industry say that constant property appreciation in last three to five years and easy bank finance which went upto 85-90 % was earlier attracting young ers to invest in real estate. However, now with a reduction in property value, banks are now also expecting higher er committment by restricting lending to only 70-75 % of the total value. This is also a major reason why young ers are avoiding the market.

    Says Rajiv Sahni, Partner Infrastructure & Real Estate Practice, Ernst & Young: "These factors put a direct strain on one's financial capacity, hence there is a reduced interest from career-starters to part with their marginal savings on real estate.





    Anshuman Magazine, CMD, CB Richard Ellis South Asia agrees that a lot of youngsters will now not be able to afford housing easily due to the state


    of the economy. A postponement of ing decisions in the short-term by this segment is thus expected. In fact the downturn in the real estate sector is visible as far as the home loan market goes. The home loan segment according to industry estimates, has witnessed a drop in offtake.

    Many private sector banks across the board also confirmed that they have witnessed a considerable decrease in the number of queries from people seeking home loans in last few quarters. Says Sushil Muhnot, executive director, personal banking, IDBI, "Only people who are well-settled and who are getting a right price are coming forward for housing loans. That segment is mostly in the mid-30 s bracket."

    AGE FACTOR

    Sharp drop in ing capacity has pushed up average age once again in 35 plus bracket

    IT/ITeS employees that earlier formed a major chunk of young home ers are now affected by turmoil in global markets

    During the boom, average age of home er had dropped to as low as mid-20 s

    Stress on limited savings is making young customers shy away from home loan

    ="http://economictimes.indiatimes.com/quickieslist/4207320.cms"]http://economictimes.indiatimes.com/quickieslist/4207320.cms
    Youngsters avoiding RE or they dont have money to purchase RE? Again you talk about some guy from some Salem college who took a non IT job! Is it not his inability to survive? Think before you paste shit here Nataraaaaaaaaaaaaaaaaj
    Youngsters avoiding RE or they dont have money to purchase RE? Again you talk about some guy from some Salem college who took a non IT job! Is it not his inability to survive? Think before you paste shit here Nataraaaaaaaaaaaaaaaaj
    Youngsters avoiding RE or they dont have money to purchase RE? Again you talk about some guy from some Salem college who took a non IT job! Is it not his inability to survive? Think before you paste shit here Nataraaaaaaaaaaaaaaaaj
    Youngsters avoiding RE or they dont have money to purchase RE? Again you talk about some guy from some Salem college who took a non IT job! Is it not his inability to survive? Think before you paste shit here Nataraaaaaaaaaaaaaaaaj
    Youngsters avoiding RE or they dont have money to purchase RE? Again you talk about some guy from some Salem college who took a non IT job! Is it not his inability to survive? Think before you paste shit here Nataraaaaaaaaaaaaaaaaj
    Youngsters avoiding RE or they dont have money to purchase RE? Again you talk about some guy from some Salem college who took a non IT job! Is it not his inability to survive? Think before you paste shit here Nataraaaaaaaaaaaaaaaaj
    CommentQuote
  • Maybe you should follow your own advice Nats :)

    Originally Posted by Natarajg007
    Youngsters avoiding RE or they dont have money to purchase RE? Again you talk about some guy from some Salem college who took a non IT job! Is it not his inability to survive? Think before you paste shit here Nataraaaaaaaaaaaaaaaaj



    Why don't you follow your own advice Nats and think before you paste such shit about others, Nats? :D

    Once again, repeat after me Nats ... People in Glass houses must not throw ...

    cheers
    CommentQuote
  • Few years back, these youngsters were in beeline to buy RE/Flats by availing loans.

    Now this market has gone away.

    No wonder RE is collapsing
    CommentQuote
  • The article in economictimes is right. My friends in banks are finding it hard to get approval on loans for their clients. Even "insurance for investment" the insurance plans that are linked with share maket was a very big hit with youngsters is taking a beating. Now people with money is happy depositing them in governemt banks or LIC. No more RE.

    Thanks,
    Sridhar
    CommentQuote
  • Originally Posted by sridharchennai
    The article in economictimes is right. My friends in banks are finding it hard to get approval on loans for their clients. Even "insurance for investment" the insurance plans that are linked with share maket was a very big hit with youngsters is taking a beating. Now people with money is happy depositing them in governemt banks or LIC. No more RE.

    Thanks,
    Sridhar



    Dear friend

    Dont say No more RE, just because youngsters are not able to buy.

    Mr. Nat will give a big list of people including ambhanis, marans, mittals, bhartis who are in line to purchase his lands in the heart of city - saligramam, and his lands in the heart of chennai suburbs - urapakkam.

    Thanks

    chataara
    CommentQuote
  • Originally Posted by wiseman
    Why don't you follow your own advice Nats and think before you paste such shit about others, Nats? :D

    Once again, repeat after me Nats ... People in Glass houses must not throw ...

    cheers

    So you have reduced yourself to the level of Chatara! Pity you!
    CommentQuote