The most essential housing decision that most people, living in a metro city face today is whether to rent or buy?Nevertheless, with swell in property prices and rise in interest rates has made buying a home too expensive for the middle class group in India.

In cities like Delhi NCR, Mumbai, Bangalore and Chennai, it is always better to live in rented property than to own one. The Indian dream of owning a home is still out of the reach for most of the middle class.

Rising property prices in metros

Buying an apartment in a metro is becoming increasingly difficult for home buyers. With rising property prices and limited budget, most investors are flocking to tier 2 cities like Lucknow, Indore, Pune, and Mysore for buying their dream homes at affordable prices.

Most of middle class families are quite baffled whether to buy or rent a home in a metro city. However, the increased costs of the property in prime areas along with the suburbs have made housing a difficult option in metropolitan cities.

Buying a house in India

In India, buying a house has high inspirational ideals, especially for the middle/ upper middle income brackets and it is often said that anytime is a good time to buy property if it is for your own use.

On the other hand, property prices have not shown signs of correction in most of the metros so that the aspiration may become a reality, forcing most of the people to live on rent.

Property prices vs. Rentals

In recent times ArthYantra, an online finance advising company, has compared the property prices with rentals in seven top cities across India, taking into account the income and saving potential of the buyer, the cost of capital, as well as the increase in property prices and rentals.

The Arth Yantra Buy v/s Rent score helps to address the buy v/s rent discourse but also explains the affordability and need to buy or rent in a given city. One can also consider rent to buy ratio before making the right decision, the ratio compares the monthly cost of renting a home to the monthly cost of owning the same place. The ratio also underlines the necessity and urgency with which the house needs to be bought.

To sum up, though renting a home quite naturally is going to be much more expensive when compared to apartments, you have to consider your budget and spend accordingly.

Whereas buying a home is an essential part of everyone’s dream, a very calculated and merit based decision is needed before taking the final step.

Renting Vs Buying: Making it simple

RENTING Pros Flexibility to relocate easily Cons No equity Annual rent increase could out space
BUYING Pros Tax-break: deduct mortgage interest and property taxes Cons Emotional satisfaction Property tax and upkeep Mortgage costs