Buy or rent a house: What is better option?

“So, while renting may seem to be a prudent decision in the short term, homeownership is still a major goal for the majority of the population,” Jain told CNBC-TV18.com.

While sharing more insights, Jain said that the average rental yields in India, one of the lowest, have mostly remained around 3 percent; residential real estate has a return of an average 11.6 percent over the past 10 year period, according to RBIs House Price Index.

He added that buying a home always ensures asset creation (ownership) for the buyer along with a significant return over the long term which is not possible from a rented property.

However, he stressed that one’s finances should only be the sole consideration here.

If we see before 2020, young, salaried home-seekers typically opted for rental properties because they were disinclined to make a big-ticket investment that would restrict them from settling in different locations. However, the pandemic has ironically made people realise the importance of owning a home as it offers security unmatched by other assets, said Saurabh Garg, Co-Founder and CBO at NoBroker.com.

Further, talking about the post-pandemic landscape, Garg said that the expenditures of individuals have been limited to the bare essentials. As a result, their savings have flourished, leaving them better equipped to make a down payment for a home purchase.

For the last 4-5 years, he said that prices have been quite stable and ever since the pandemic broke, low interest rates, reduction of stamp duty (in a few states), and builder discounts have made home-buying even more affordable.

"These benefits have made homeownership more preferable in the eyes of property seekers as, at the end of the day, they will have a tangible asset in their possession, something that is not possible through renting a house. Moreover, the remote work culture has also ruled out the need to own a home near offices and main city centers. This has allowed prospective homeowners to aspire for and purchase bigger, better homes – a trend that is likely to continue in 2022 as well," he added.

New-age homebuyers mostly millennials in India today have many options to choose from whether they want to purchase a spacious home at affordable price points in the suburbs or rent an apartment in a gated society in a neighbourhood of their choice.

Above all, the present scenario offers the most opportune time for home-seekers to finally make that commitment and turn thought into action by taking a firm step towards realizing their dream of owning a home, Garg told CNBC-TV18.

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