to buy or rent the big indian Debate
‘The Realty+ Show’ on Republic TV first episode of the series featured the debate on the hot topic of buying or renting a house.
The primary benefit of owning a home is that your home equity will grow as home prices rise. But, owning a house also carries an emotional attachment for some. Also, homes can take time to sell or rent out, so relocating for a job becomes more complicated. But as an owner, the home is yours to paint and remodel as you wish! So, how does one make a decision?
Amit B Wadhwani, Founder, Sai Estate Consultants Chembur Pvt Ltd (SECCPL) while assuring a pragmatic approach to a subject considered clichéd, asked Dr. Anurag Batra, Editor-in-chief of BW Businessworld of his views. Batra said, “Since the numbers of homebuyers has shrunk, reaching out to the right target group is crucial for developers. Arnab Goswami, Managing Director & Editorin-chief of Republic TV questioned that as homes are part of people’s lives, can they invest in a property while keeping their safety nets on? A buyer needs to know when and where to invest.
Bharat Dhuppar, Group CEO, Raiaskaran concurred the there is a need to communicate about real estate in the right manner so as to reach the right set of people and create the right impact. Vinod Rohira, Managing Director & CEO, K. Raheja Corp commented that with policy reforms, real estate sector is being cleaned of its clutter and is becoming more refined in terms of product offerings.
Shweta Shalini, Entrepreneur, Govt Policy Expert & ED Maharashtra Village Transformation Foundation
emphasized that for Indians buying a house is an emotional decision. It showcases their identity. “I believe each household has at least once debated on whether to buy or rent. I think the decision is very individualistic and very much depends on a family’s inlay vs. outlay. There are plenty of aspects involved such as ‘will I be working in this city forever?’, ‘can I pass it on to my kids? Etc.”
According to Dhuppar the equity markets present a projection that real estate is a bad investment. Wadhwani considers real estate as a long term investment and not for a quick ROI. Pointing towards the contradicting behaviour of millennial generation Batra said “The young generation is buying their first home and to put on Airbnb for rental returns but majority of Indians buy because property is a hard asset and serves as their financial savings.”
There’s a strong case to be made for renting a home too. As Goswami puts it, “Homebuyers today are much younger and buying a home can be a difficult process, thus making renting a more convenient option for them.” Batra
concurred that buying a home in metro cities make sense only if one is based in the city for a long time.
Rohira brought to notice a very valid factor that even for renting, someone is buying a flat. “Developers don’t
personally rent out apartments. Investors buy to rent. Young Indians are buying as the urban environment has completely changed with important life milestones like marriage and having kids are getting postponed”
affordable housing Mantra
‘Affordable housing’ has been the latest buzzword. Rohira was of the opinion that the word affordable has been much abused. He said that real estate affordability is dependent on infrastructure drives real estate and social infrastructure churns out new micro-markets. “In Mumbai Metropolitan Region (MMR) up to 70 to 80 per cent of buyers are end-users. RERA and GST have also helped streamline the sector but, the prices will increase in the next few years due to developer’s additional cost for more approvals and meeting quality & timelines.”
Batra likened the notion of ‘affordable housing’ to ‘Parle G’ – something that everyone can afford and everyone wants to have! In his view the prices are likely to reduce in 3-4 months and prospective buyers can wait for the right opportunity. Goswami maintained that Indians are not only price-sensitive but also price-aware. “Millennial are very prudent with their choices and they study the market very closely. They are aware of the price trends and the developers need to be honest in their pricing.”
Wadhwani putting the onus on developers said, “Developers need to take people in confidence and tell them honestly about the pros and cons of an affordable housing unit of 300 sqft.” Shalini interjected that affordable housing seems to be targeted only at the urban segment and neglects the need for slum rehabilitation and providing inexpensive homes to those who really need it.
The panel concluded by mentioning that both buying and renting markets are growth markets in India. There are enough consumers for both products. They advised prospective buyers to buy only when they can afford to and choose to rent in the meantime. Renting is a logical choice for those on short-term stays in a city and buying is a great decision and a lucrative asset for those who are now based in a particular city.
Batra’s insights were that buying for self-use is a good option and reiterated his prediction that prices will reduce in the coming months, providing an opportune time for buying. Wadhwani wrapped up the episode on a note of encouragement, “The final word on this is that if you have to consume for the long-term, such as in case of a family home or as capital investment, then do go ahead and buy your dream home’
(L-R) Bharat Dhuppar; arnab Goswami; amit wadhwani; DR. annurag Batra; Vinod Rohira; shweta shalini