Rents getting too high? Consider buying a home

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Akansha Narang and family pay Rs 30,000 for a rented accommodation in Kormangala. Her landlord has just agreed to extend the lease contract and increased the rent by Rs 3,500 per month owing to an increase in housing demand in the last few months.

While residential real estate across top cities registered some amount of inaction, lease market is said to have fared better. This means while prospective buyers were waiting and watching for say a Budget 2015 session to talk decisively about tax rebates, housing finance, etc., there were people altering choices for some time and upgrading their addresses.

Venkat Parthasarthy, a broker in Bengaluru says, “Across the city market, rental values have taken a leap in the range of 2-8 per cent. After the prolonged lull, prospective buyers are now contemplating on an actual purchase that would be way better for their pockets. EMIs could replace rents and at the end of it, you can boast an investment."

Consider the above table of the preferred localities for sale and rent in the city. PropIndex, a quarterly research initiative by Magicbricks suggests that the rental values have taken a leap to the tune of 1-8 per cent as seen in the figure. Capital values have on the other hand staggered with some areas such as HSR Layout and Marathahalli registering the highest percentage change. On the whole, the market looks discounted. This is the very reason why buying a home could be a wise decision. Let’s do some calculation here:

Sarjapura Road is a rapidly growing corridor in East Bengaluru. With schools, colleges, hospitals, job markets and hangout options around the corner, the stretch is becoming popular among the young buyers crowd. Would it make sense to buy a home here or live on rent?

As per our calculator, you should be buying to save money in the long run!

Kiran Ramalingam, a consultant in the city says, “Some buyers are of the opinion that living on rent might be a good choice over buying. However, in the long run, neither do the rents remain the same nor do the capital values. Overtime, it is but natural to look back and worry over lost time and prices which would seem affordable in a few years.”

Similarly, if you are planning on selling your property today, experts feel you may want to hold on to it for the next six to eight months, unless you have struck a good deal. The market is slowly picking up and before the prices escalate, buyers invest and sellers hold on!

Source: magicbricks