Should you buy a house in India or rent it? This Anarock study can help you solve your real estate dilemma

To buy or to rent? This has been a central question in the Indian real estate sector for years. On Wednesday, real estate consultancy Anarock published a study that attempts to clarify the dilemma.

The research data showed that rental values ​​in key micromarkets across India’s top 7 cities increased by up to 72 percent between the end of 2021 and June 2024. However, capital values ​​saw less growth.

In key markets in BangaloreIn Pune, Kolkata and Chennai, average residential rental values ​​increased more than capital values ​​between the end of 2021 and June 2024.

However, areas in NCR, MMR and Hyderabad saw the reverse trend – capital values ​​appreciated more than rental values.

Rents have increased by more than 50 per cent in areas such as Sarjapur Road in Bengaluru, Hinjewadi in Pune and Gachibowli in Hyderabad.

On the other hand, capital growth was high in areas such as Noida’s Sector 150 and Mumbai’s Chembur.

“This data can be a key parameter, though by no means the only one, in determining whether it is more advantageous to buy a property or opt for renting,” said Prashant Thakur, regional director and head of research at Anarock Group.

Anarock said that not all people who migrate to a given city in search of job opportunities intend to settle there permanently. Others may be attracted by the city’s urban character and decide to settle there, while others may see the value of investing in property there, regardless of whether they will settle there or not.

Other factors that drive such a decision are financial capacity, career growth prospects, stage of life, family size and personal preferences.

“If the individual chooses to purchase the property through a Mortgage loanhas the financial means to make a 20 percent down payment and borrow the remaining amount over a 10-year period at an interest rate of 9.5 percent. interest rate“It’s definitely a profitable purchase,” Thakur said.

“Instead of spending a large amount of money on rent, the individual can pay monthly installments and ultimately own the physical asset after a period of ten years,” he added.

Personal preferences and prerogatives matter

The consultancy added that interestingly, amid a growing aversion to high-risk investments, an increasing number of tenants view rent as an expense and monthly installments as SIPs (fixed-rate investment payments) towards a non-volatile asset.

“Pro-homebuying sentiment is also supported by relatively cheaper home loan interest rates, which currently average between 8.75 percent and 9.5 percent,” it noted.

Thakur said: “There is a lot to consider when deciding whether to buy or rent a home, and investment logic alone will not guide all those decisions.”

“If a dilemma arises, it makes sense to be sure of one’s personal preferences and prerogatives, and the performance of the market one is considering,” he said.