In Short:
The choice to buy or rent property in India has been debated for years. A recent Anarock report reveals rental prices in major cities rose up to 72% from late 2021 to June 2024, while property values grew less. Factors like personal finances, job prospects, and lifestyle influence this decision. With lower home loan rates, many view paying EMIs as investment rather than renting.
To Buy or To Rent? The Dilemma in Indian Real Estate
It’s a question that has puzzled many in the Indian real estate landscape for years: Should you buy or rent a home? This timeless dilemma was recently addressed in a revealing research piece by **Anarock**, a leading real estate consultancy.
Shifting Rental Trends
The findings show a remarkable trend: rental prices in prime micro-markets across the top 7 cities in India have surged by as much as **72%** from the end of 2021 to June 2024. Meanwhile, the increase in capital values hasn’t kept pace.
A Deep Dive into Key Markets
In pivotal locales such as **Bengaluru**, **Pune**, **Kolkata**, and **Chennai**, average rental values have outstripped capital values during this period. The rental landscape is clearly shifting, which might make potential renters think twice.
Regional Variations
Conversely, in the regions of **NCR**, **MMR**, and **Hyderabad**, the trend appears to be on the opposite end of the spectrum; capital values here have appreciated more than rental values.
Highlighting Key Areas
Rents have soared over **50%** in bustling areas like **Sarjapur Road** in Bengaluru, **Hinjewadi** in Pune, and **Gachibowli** in Hyderabad. However, capital growth is robust as well, particularly in **Noida’s Sector 150** and **Chembur** in Mumbai.
Understanding the Decision
**Prashant Thakur**, regional director and head of research at **Anarock**, emphasizes that such data serves as one of several key parameters when deciding between buying or renting a property. “Not everyone moving to a city for job prospects dreams of putting down permanent roots. Some individuals are drawn to the urban lifestyle, while others see the value in investing, whether they settle there or not,” he notes.
Factors Influencing Home Decisions
This decision crafting isn’t strictly financial; aspects like job growth potential, family size, life stages, and personal taste all play crucial roles.
Clever Financial Choices
If one opts to buy using a home loan, has the means to front a **20%** down payment, and borrows the remaining amount over a **10-year term** at an interest rate of **9.5%**, that can indeed be a lucrative investment. Thakur asserts, “Transitioning from hefty monthly rent payments to manageable EMIs means you’ll own a physical asset after just a decade.”
The Value of Ownership Mindset
Interestingly, as apprehensions against high-risk investments grow, more renters have started to view rent as an expense. In contrast, they treat EMIs as systematic investments in a stable asset. Adding to the sentiment favoring homeownership is the relatively affordable home loan interest rates, now hovering between **8.75% and 9.5%**.
The Bottom Line
Thakur advises that the question of buying or renting involves more than just financial reasoning. “Your personal preferences and priorities hold significant weight in this decision. When faced with this dilemma, ensure you’re confident about your personal circumstances and the real estate market you’re looking at,” he concludes.
