Buying Property in a Metro, Still a Dream for Middle Class

Bangalore: When it comes to metros, which is more preferable, buying a house or to live in a rented property? This is a factual question people ask themselves after leading their lives in Indian metro cities. But, with the increase in property prices and rise in interest rates, buying a house became unaffordable for the middle income group in the country, reports M Allirajan of TNN.

In places like Delhi-NCR, Mumbai, Bangalore and Chennai, it is always better to live in rented property than to possess, according to a study based on rental and property values in metros by ArthaYantra, a financial service firm. And, best places which offers good opportunities to own a house rather than rent are Pune, Hyderabad and Kolkata.

According to ArthaYantra’s rent to buy ratio, individual gross income in such metros are quite low which signifies that paying rent is economical than to pay EMIs (Equated Monthly Installment) for home loans.

In Chennai, the rent to buy ratio has recorded at 0.25 which means a home buyer need to save for at least six years to make down payment to buy a property. Chennai is observing the third highest property prices which in turn recorded as the highest jump in the National Housing Board (NHB) residential index value.

Similarly, in Bangalore, the ratio stood at 0.27. Since, the property prices have become moderately high in the city and so, people are opting for rented property than owning one. The ratio was 0.20 for Delhi-NCR which signifies that the rental value is cheaper than high property prices, making the city one better option for rent. The scenario is same for Mumbai with unaffordable property prices and limited space.

Whereas, the same ratio in Kolkata stood at 0.41 which indicated that the rental value for property is high in comparison with property prices, making Kolkata a suitable place to buy property.

However, Hyderabad and Pune is an ideal location for professionals to own property as individuals have to save money for minimum of four years to make down payment for buying property. But, in metros like Delhi and Mumbai, individuals have to save for eight years to afford a home.