In a recent tweet, Zerodha’s billionaire founder, Nikhil Kamath, shared Anorak’s infographic on why rentals are skyrocketing in India. The data shows there has been a tremendous spike in rentals since 2019, across India’s bustling metros. This post-pandemic phenomenon is largely due to a return to work from the office model in most companies. With more employees returning to their work cities, housing has been a major problem due to low supplies. This has also caused a hike in demand for residential properties in major cities. According to the firm’s data, unsold properties are the lowest since 2014, despite decade-high demand. The only glitch is the hike in interest rates, which has been a downer.
Nikhil Kamath writes that the spike in housing rentals seems like a short-term phenomenon. His bet is still on housing prices going down.
Looks like a short-term phenomenon; as long as you can #rent at 3 per cent and #housing loan rates are over 8 per cent, this won’t work. If I had to bet on house prices going down vs rent going up to reach equilibrium, my bet is still on the former.#realestate #rentindia pic.twitter.com/3WydeTlDba
— Nikhil Kamath (@nikhilkamathcio) April 26, 2023
Last year, in November, Kamath questioned why a 1000-square-foot apartment costs so much in Mumbai. He also remarked on why one would buy an apartment when one could rent it for 3 percent.
Why then does a 1000 sqft. apartment still cost so much in Mumbai? 🤨 And why would you buy, if you can rent at 3 per cent…#interestrates #fertilityrate #realestate #India
— Nikhil Kamath (@nikhilkamathcio) November 1, 2022
Earlier, shark Anupam Mittal had invited the startup community to build in Mumbai instead, over news of growing rentals in Bangalore, where Nikhil Kamath is based. However, the Internet begged to disagree with Mittal’s advice.
Build in Mumbai instead … consistent, vibrant & magical @mumbai_tech_ 🤗💯 https://t.co/dR1wkSHc54
— Anupam Mittal (@AnupamMittal) April 5, 2023
Meanwhile, the internet has its own opinions about real estate. Some prefer rentals, while for others, owning a home is a dream.
Few people understand this argument. In UK buying homes for rent is a profitable business because yields are nearly 5 pct (or more) helping to maintain a decent supply demand situation on housing. Though today is a tough interest rates situation, for years and years people have…
— RVS Sridhar alias Sridhar Rallabandi (@SridharRVS) April 26, 2023
I feel The PR around high rentals is infused activity by the Real estate giants. Consumers don’t understand how it’s a loss if they are planning to consider home for renting purpose / investment. But have learnt not to pursue those who think they are doing right with their own…
— Chetan Yallapurkar (@chetancoach) April 26, 2023
Buying versus renting for yourself is not a return game – it is an emotional argument – a feeling of stability … You will not invest in rented property to make a home.. A fund manager, making Rs 1 cr plus is trapped in this game – living rented 50K a month house in Mumbai
— Girish Mittal (@G_MITTAL) April 26, 2023
I’m in Mumbai suburbs..current rent is 43k ..sale price is 1.7cr..so lowest emi with max loan will be anyways above a lac ..another house in Kerala ..emi is 38k ..rent is only 20k max ..in which place rent > emi ..as I said only if u buy house full cash then it’s investment
— Kratos (@TruthOfIndians) April 27, 2023
Yeah I mean owner of a stock broking firm would never advocate for buying home over stocks.
— F#4 (@Revived_CAT) April 26, 2023
Today every salaried person is uncertain about his next destination of stay 5 year from now. Then why to waste money in home loan of 20 or 30 years….
— Raviji (@Ravi83031181) April 27, 2023
Real estate is a good investment still in modern times. But if you owned it a long time back and also if you have multiple properties.
— siddheshh (@siddheshh_14) April 26, 2023
Buying = Becoming bonded labour for bank for 25 yrs. Only reason you should buy is if u have too much money and don’t mind splurging , just like you would on a luxury car.
— Emperor Xi (@XisZucks) April 27, 2023
See Also: ‘Opportunity Is Here,’ Billionaire Nikhil Kamath’s Advice For Desis Settled Abroad With Fancy College Degrees