Delaying buy decision may push costs higher amid rising prices

Pay 20-30% of cost as down payment; EMI should not exceed 40% of take-home salary

- SANJAY KUMAR SINGH & BINDISHA SARANG

TRANSITIONING FROM TENANT TO HOMEOWNER

A decade ago, tenants in key cities like Bengaluru, Mumbai, Pune, Chennai, Hyderabad, and Delhi-NCR would rent nine times before buying a home. Today, the younger generation purchases after renting only four to five times, according to NoBroker, a nobrokerage property site.

In Bengaluru, the median age of first-time home buyers has dropped from 42 to 34 in three years, with millennials and Generation Z increasingly opting for homeownership over renting.

Rising rentals driving the shift

One factor behind this shift is rising rentals. "With rent surging by over 30 per cent in major cities in the past couple of years, buyers are increasingly motivated to purchase homes," says Amit Agarwal, chief executive officer (CEO), NoBroker.

Home loans have made it easier to buy at a younger age. "This shift is due to the increased availability of mortgages, which are more accessible and cost-effective compared to a decade ago," says Vivek Rathi, national director-research, Knight Frank India.

Increasingly, tenants regard paying rent as a waste of money. "Many tenants view rent as an expense, while they see EMI as a systematic investment plan (SIP) for building a stable asset like real estate,” says Santhosh Kumar, vice chairman, ANAROCK Group.

Current home loan interest rates range between 8.35 and 9.50 per cent, not inexpensive but not exorbitant either. "Home loans offer more attractive tax benefits than rental housing," says Kumar.