Renting still wins in most metro cities; buying works in select urban pockets — 2025 breakeven analysis

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Homeownership remains out of reach for many first-time buyers

India's housing real estate sector is still seeing prices rising at a greater rate than consumer inflation—house prices will probably appreciate by about 6% this year, and rentals are expected to rise 7-10% Affordability remains beyond reach despite mild monetary easing, pushing rental demand hard and keeping property out of reach for the majority.

Rise in rents slows down—but EMIs still dominate rents

Rent inflation in major metros such as Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Pune, and Chennai has slowed down to 7–9% for the half year of 2025. Yet, EMIs are way bigger than rents—about 2.5 to 3 times bigger. This is the whopping difference that makes renting so much cheaper, especially for shorter tenure.

Financially, purchasing becomes possible in a limited number of cities

The verdict is quite different across cities. In cities such as Mumbai, Delhi, Gurugram, and Pune—where rental returns fall below 2%—you would have to hold on for more than 30 years even to break even, says financial planner Lovish Anand. On the other hand, south metros such as Bengaluru, Hyderabad, Bengaluru, Kolkata, and Thane provide much healthier returns (more than 4%), which means a much quicker breakeven period of 3 to 8 years.

Affordability is slowly improving but still tilted

Mumbai and Pune cities are moving towards more positive levels of affordability in 2025, while year-over-year improvements in affordability are taking place in Bengaluru, Hyderabad, and Chennai—even though lower than at their highs. But even holding back first-time buyers are high interest rates and rising property prices.

FAQs

Q: Why is renting still the better option in most metros

EMIs of apartment houses in metros like Mumbai and Delhi-NCR usually run into more than double or triple the rent paid monthly. With return on rentals of only 2%, buying makes sense only after decades of retention of the house.

Q: Which cities is buying economically feasible in?

In cities like Bengaluru, Hyderabad, Pune, Thane, and Kolkata, returns from rentals are more than 4%. With returns at this rate, breakeven might come in a mere 3 to 8 years—giving purchasing a real possibility.

Q: Are rents continuing to rise faster than house prices?

Yes, rental rates in metros are going to rise between 7% and 10%, far exceeding inflation and making the rent-vs-buy scenario for buyers challenging.