Middle Class Facing Buy Vs Rent Dilemma in Major Indian Cities

Middle Class Facing Buy Vs Rent Dilemma in Major Indian Cities – Research by ArthaYantra

  • Micro markets behaving differently, Mumbai and Pune prefer buying, while Delhi and Bangalore prefer renting.
  • Inflation adjusted property price rise is negative in most of the places in the country.
  • Expanding cities offer economically viable alternative for the salaried professionals to own a property at the expense of life style.

ArthaYantra.com, India’s first Robo Financial Advisor, has today launched its 3rd edition of its annual Buy vs Rent real estate report “ArthaYantra Buy vs Rent 2015”. The report covers real estate buy and rental markets in eight major cities across India: Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune. The report provides perspective of Buying Vs Renting of properties from a personal finance perspective.


In order to create an objective measurement metric, ArthaYantra developed a proprietary composite score “ArthaYantra Buy vs. Rent Score” (ABRS)™ to address the buy vs. rent discourse. ABRS™ not only helps in making the Rent vs Buy decision but also explains affordability and the need to buy or rent in a particular city. It uses a host of parameters including, salaries, taxation, prices to arrive at a recommendation.

ArthaYantra’s research addresses important consumer questions such as:

How much more money does a professional need to shell out for buying a home compared to renting it?
At what salary level should a professional buy a property?
At what salary level should a professional Rent a property?
ABRS™ answers these questions by considering three important factors: rental value, property price and gross income.

Nitin B. Vyakaranam, CEO ArthaYantra, adds

“It is important to have an objective personal finance perspective when making the buy vs rent decision. Often our emotion drives the decision, not numbers. With ABRS report, ArthaYantra has given a tool for every individual in India to get this objective view. Each individual or family makes a real estate buy or rent decision, based on their financial conditions, our report will help them in this decision making process”.

City Specific Findings


  1. Bangalore city has an increase in NHB index by 7% from 2007.
  2. City is more preferred for renting as the rentals increased by 37.5% in 3 years whereas the property prices rose by 12.65%.
  3. Suitable for professionals having income more than 15 lakhs to buy a home.
  4. Mysore Road and Old Madras road have the most affordable prices to buy/rent a house.


  1. Highest growth in the NHB index among all the cities in the India by about 249%.
  2.  Unlike the regular growth in NHB Index, property prices dropped by 3% from 2012.
  3. Professional under income group of 20 lakhs or above can afford to buy a home in the city.
  4. Kolathur and Medavakkam are most affordable places to buy/rent a house.


  1. Second most expensive city to buy a home. The NHB index doubled (99%) over 7 years.
  2. Rents have increased by 29.75% while property prices are increased by just 2.6%.
  3. Recommended to rent for all the salaried professionals irrespective of how much they earn.
  4. Areas like Indirapuram (Ghaziabad) and Greater Noida Expressway are affordable to buy/rent a house.


  1. Most affordable place to buy a home and second most for renting. Negative growth in NHB index compared to 2007.
  2. Rents increased marginally by 1.93% from 2012 whereas the property prices dropped by 5%.
  3. Professionals with income of 10 lakhs or above can easily afford a home.
  4. Uppal and Rajendra Nagar are most affordable place to buy/rent a house.


  1. Kolkata city NHB index grew by 106% from 2007.
  2. However the rents as well as property prices dropped by 8.55% and 2.69% respectively.
  3. Affordable to buy a home for professionals having income above 12 lacs per annum.
  4. City outskirt areas like Howrah and Jadhavpur are affordable to buy/rent a house.


  1. Most expensive city to either buy or rent a house. The city NHB index grew by 129% since 2007.
  2. Property prices and rentals increased by 49.87% and 13.07% respectively.
  3. Suitable for renting for all income groups, however most of them prefer buying a home over renting.
  4. Some areas like Mira Road and Kalyan could be affordable to buy for professionals belonging to the income group of 20-25 lakhs.


  1. Stable job market resulted in rise in rental and real estate prices. The NHB index shows 132% increase over 7 years.
  2. The property prices and rentals grew by 39.9% and 21.21% respectively in last 3 years.
  3. Affordable for professionals of income group of 20 lakhs and above to buy a home.
  4. Hadapsar and Kondhwa have most affordable to buy/rent a house.


  1. City with the cheapest rentals and second lowest property prices.7 year growth in NHB index is 109%.
  2.  Property prices lowered by 17% since last year.
  3. Affordable for anyone having income above 12 lakhs per annum.
  4. Vastral and Vejalpur have the most affordable places to buy/rent a house.

Most of the areas don’t provide affordable properties to buy within the city, the properties that are located in the outskirts are affordable which would increase the travel time to the work place and additional commuting cost. However buying the property within the city area would not be possible for most of the salaried professional which leaves them with an option of either renting a home within the city or buying a house on the outskirts of the city.

For the full report go to: https://arthos.arthayantra.com/research.html