Zerodha's Nikhil Kamath changes tune in buying vs renting debate, buys his first house. Here's why

Nikhil Kamath further criticised the financial burden of buying property, particularly the high stamp duty.

Nikhil Kamath, co-founder of Zerodha and a strong proponent of renting over buying, has revealed that he has now purchased a house, shifting his long-held stance. Kamath, who has consistently favoured renting as a more flexible and advantageous option, discussed his decision in a recent episode of his podcast, "WTF is with Nikhil Kamath." Joined by real estate experts Irfan Razack, Chairman & MD of Prestige Group, Nirupa Shankar, Executive Director of Brigade Group, and Karan Virwani, CEO of WeWork India, Kamath reignited the debate over renting versus buying property.

While Kamath had previously defended renting for its flexibility, he acknowledged that it comes with one major drawback. “The thing with renting, of all the advantages of renting, there is one disadvantage: you don’t have foresight as to when you can move out of the house. I had to move out of this house, whereas I might have liked to stay longer in this house,” Kamath noted.

When asked about the financial strength gained by purchasing a home, Kamath expressed dissatisfaction with the illiquidity of real estate investments. “I feel something like gold can give that to me. I hate the illiquid nature of real estate. Places like this have fewer buyers and if 10 people decide to sell, then price goes haywire and pricing is very arbitrary in nature," he explained. Kamath contrasted this with the stock market, where larger volumes of buyers and sellers create more stable pricing dynamics.

Kamath further criticised the financial burden of buying property, particularly the high stamp duty. “In stock market, I can buy and sell without paying 5% to 6% stamp duty,” he remarked.

The podcast discussion also delved into the profitability of buying property to rent. Kamath expressed scepticism about the return on investment from this strategy, particularly when accounting for inflation and interest rates. “I think nobody makes money from buying and renting a place. You do not have occupancy throughout the year for something like AirBnB. Accounting for inflation and interest rates, the return on this investment is negligible,” Kamath said, echoing concerns over the limited financial benefits of such ventures.