Reading Time: 4 minutes

Should a person rent or buy a property during COVID? Owning a property or a home is always a monumental achievement in peoples’ lives. However, the cost of a home is not something everyone can afford – at least, not whenever they desire. The amount of money necessary to buy a home or own a piece of land and then construct a viable abode is certainly significant.

That is why people often turn to rent – the more affordable option. This housing option enables someone to live in a place by paying monthly rent, but the person living there is not the owner. Yet, sometimes, the amount paid in monthly rent is as much as – or nearly as much – the probable monthly home loan repayment amount.

Thus, leading people to opt for taking a loan to buy a home and paying back that loan every month instead of paying rent. All of these, and more, make the decision of whether to buy or rent a flat perplexing even under normal circumstances. But now as the pandemic rages on, the decision has become even harder.

So, for those who are on the fringes about whether to rent or buy a property during COVID, we’ll objectively look through the positives and the negatives of both options and present them with the necessary information to help them make the right decision.

Why Renting (for Now) Makes More Sense

a blackboard, coffee and phone
Renting is the more affordable option

Since last August, property prices have been going up due to the rising cost of construction materials. Steel rods that were priced at around Tk 47,000 to Tk 50,000 during that period were being sold at Tk 73,500 in June of this year. The same goes for other raw materials for construction as well. As a result, the prices of under-construction and planned projects are quite high.

The sliver of hope during this rise is the fact that the government has introduced some tax cuts – more precisely, a reduction of Advanced Income Tax (AIT) and Advance Trade VAT (ATV) – to curtail this price hike. In addition, the global inoculation effort has gained significant progress recently and global trade might return to normal soon – thus, reducing and stabilizing raw material prices in the near future. So, waiting and renting, for now, might be the wiser choice.

Another reason to rent instead of opting to buy a property during COVID is the current rental market scenario. Today, it is a tenant’s market in Bangladesh. Meaning, it is the tenants who are at a proverbial advantage when it comes to renting. The large exodus of people from the capital city has left behind a gap in the market. Many landlords are having difficulty finding tenants, and in many cases, having to settle for lower-than-expected rent.

As such, a person might be able to find a great deal in renting an apartment in Dhaka and wait till they are more fiscally sound before moving forward with buying. And with proper savings during the period, a lesser amount of home loan might be necessary.

Why Buying Makes More Sense

a blackboard, coffee and phone
Many dream of buying and owning property all their life

A lot of people say you can never go wrong with buying a property. Be it today or tomorrow, the price of a person’s property investment will yield great profits. And as everyone knows, property prices always tend to go only in one direction – up! Land prices, in particular, have seen the greatest price rise in the past decade.

Places like Mirpur and Uttara have seen their land prices skyrocket over the last few decades. According to REHAB, between 2000 and 2010, the price in these two areas have risen by 471% and 650% respectively. A similar fortune waits for land in places like Purbachal Marine City that is poised to become an upcoming hotspot for land investment.

While the price increase might not be as drastic as land, investing in apartments might be the right call now. Property registration costs have slightly been reduced in recent times. Even though the reduction could have gone even further, it is more affordable to buy a property now and will be till registration costs are increased again.

The single-digit interest rate on loans is another reason to buy a property during the COVID. The 9% interest rate came into effect in April of last year and is still in effect. The regulation change has been within the pandemic scenario, and there is no guarantee of how long it will remain. As such, now’s the perfect time to capitalize on this opportunity to buy properties in Bangladesh.

And a final reason to buy flats now is if someone has ample undisclosed income that they want to legalize. About Tk 19.7 billion was legalized under the current ongoing scheme last fiscal year. Luckily, it was renewed for another year.

Final Thoughts

Understandably, the decision to rent or buy a property during COVID can widely vary from person to person. However, the knowledge necessary to make an informed decision is now available. Property investment is a big decision and should be taken with much consideration. However, whether it is buying or renting, Bproperty is here to assist any and all real estate stakeholders.

Write A Comment