Where to rent or buy a house?

Buying a house or renting it is a major decision that is dependent on the city where you work, your financial health and personal goals. Both require a regular income and a certain degree of effort to maintain. While renting offers flexibility, it entails regular monthly expenditure.

Home ownership, on the other hand, may bring in intangible benefits such a sense of stability and pride of ownership, the million dollar question is to do with whether it is affordable. Moneycontrol and LiasesForas conducted a survey of the most and the least affordable cities in the country. For this a total of 32 cities with 41,482 projects were considered. Manisha Gupta speaks to experts on what is the most important criteria while buying a house or for that matter renting one.

Affordability of a house depends on many factors such as purchasing power, cost of living, connectivity, ease of access among others. Moneycontrol-Liases Foras House Purchase Affordability Index considers rental yields as the chief parameter. The index represents how easy or difficult it is to own a property in different cities.

“The reason being that rentals best represent the purchasing power for housing. Capital values can be speculative but not rentals. While comparing big and small cities, the yardstick had to be the same. For example, if in Bengaluru, the spread is 50 km, in smaller cities such as Raipur, the spread is only 10 km. These geographies also have different purchasing power and income classes. We wanted the rental yield representation across the entire cross section of cities for which we divided cities into distance bands and considered the maximum distance from the city centre to the spread of the projects,” said Pankaj Kapoor, managing director, Liases Foras.