Here is a completely different perspective on real estate costs!! For a typical middle class person – say earning Rs. 6 lakhs at age 43..obviously houses look damn expensive in Mumbai.
However when you look at the salaries in the BFSI space – banks, mutual funds, life and gen insurance companies, brokerage….it is common to find 30 year old and well qualified guys/gals earning about Rs. 10 lakhs. Now if you stretch this, you also find a few earning as high as 30L.
If a 30 year old guy earning Rs. 28 lakhs is married to a girl aged 27 earning Rs. 22 lakhs, the take home income is about Rs. 50 lakhs. This really puts them in the RICH class – but their requirements could be higher!
When such a couple goes and sees a 3 bhk for buying, they do not bat an eyelid when they hear a figure of 2 crores. Let us say they make a down payment of Rs. 50L….then it is just an EMI of Rs. 1.5L per month.
I met a few such couples – in the BFSI space..- and all of them are either buying houses in the range of 2-2.5 crs….and all are in their late twenties or early thirties. The assumption that they make is that the job / similar job will continue for the next 20 years. This is not an unfair assumption – and the only KNOWN interruption is for having a baby/ babies.
The risk of course is that the salaries may not go up too much, but surely it will beat inflation. And even if the salary does not go up too much, they can be sure that they will get similar paying jobs. However there is a funny risk of both incomes stopping! Imagine when the wife is on maternity leave, the husband loses his job/ is downsized.
Well most of these kids have prosperous parents – so flying back to the original nest is a perfectly nice option possible. (I may do a separate post saying why parents should not allow this, but that is a different matter altogether!!!).
So for many of these 28 -35 year olds Mumbai prices do not look as intimidating as it looks to a person earning Rs, 5-8L and wondering whether it is advisable to work in India
In fact one of the kids said that his income has gone up so much that salary: housing prices have moved in HIS FAVOR…NOT against him! all d best !!
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