New parent seeks suggestions on buying versus renting home in Bengaluru; Redditors weigh in

A 33-year-old Redditor in Bengaluru is battling a similar dilemma and has sought suggestions from the internet community.

“We will likely stay in Bangalore for another 15-20 years due to kid’s education (currently 1 year-old) and maybe even longer and are in a dilemma to 1) buy an apartment in Bangalore east for a price close to ₹90L with approx ₹50L downpayment and rest as loan. 2) Live on rent. Currently paying ₹39k in maintenance,” the social media user wrote in his post on Reddit. He added that their total compensation is ₹2 lakh (a month) including his wife’s income.

Location is a key factor

A majority of the respondents to the Bengalurian’s post leaned in favour of buying a home taking the 15-20 year long timeframe into account. They also pointed out that location would be a key component into making the crucial decision requiring proximity to schools and offices.

“Owning a house in the neighborhood faraway from the school and your workplace can substantially affect your quality of life,” one of the users cautioned.

Should you make a hefty downpayment?

Netizens debated whether making a hefty down payment would be the right move to make.

“I would not pay the entire 50L as down payment, If I don’t have emergency 12L cash or other investments like gold and stuff,” one of the social media users commented.

Also Read: Bengaluru’s housing sales register 4% growth in H1 2024; homes priced at ₹1 crore and above witness 76% annual growth

“If you do less down payment or longer EMI tenure, the money you won’t pay towards the extra EMI will also give you returns,” another user suggested.

Rent or buy?

Many suggested that the Redditor wait a few years before making the purchase.

“Rent till you have clarity on school and can pay 70% down. Explore using your PF to pay more upfront. Be careful of loss of job or life scenarios and get reem insurance. Given the proposed improvement in metro connectivity etc over next few years – waiting may not be too bad,” a Redditor opined.

“I understand there is a fear that in a few years you may be unable to afford a similar place, but given the sudden rise in real estate over (the) past few years, it’s entirely likely to stay stagnant for the next few,” the individual added.

Also Read: Bengaluru tops housing sales and launches pan India in Q2 2024, ₹1-3 crore homes capture 63% of new launches

According to data from proptech platform Square Yards, a total of 28,356 transactions were recorded in Bengaluru during the second quarter of 2024, marking a 19% increase over the previous quarter. The value of registered sales surged at a rate of 30% during the same period, reaching ₹19,631 crore by the end of the June quarter.

“Despite challenges such as flooding and water shortages, homebuyer demand remains notably resilient, underpinned by a strengthening IT sector and the blend of full-time and hybrid working models. Our data highlights that while the East and Southern suburbs retain their appeal, Northern suburbs are rapidly emerging as key areas of interest for both apartments and plots,” said Sopan Gupta, Principal Partner, Square Yards.

Branded developers, particularly those delivering quality projects, are witnessing successful launches with swift offtake, Gupta added.

Bengaluru real estate market’s price dynamics

According to a report by property consultancy Anarock, Bengaluru saw the highest annual jump in average residential prices at 32% – to ₹7,800 per sq ft by the end of H1 2024, from ₹5,900 sq ft by H1 2023-end.

In the last five years, average residential prices have surged by 57% in the IT capital. “Average residential prices in the city stood at ₹7,800 per sq ft by H1 2024-end against ₹4,960 per sq ft at H1 2019-end,” said Prashant Thakur, regional director and head at Anarock Group.

The report cited increasing demand and rising construction cost post the Covid-19 pandemic for the trend.

Also Read: Netizens discuss a case of ₹38,000 rent for unfurnished 1 BHK in Bengaluru, post goes viral on Reddit

Presently, North Bengaluru commands the highest average capital value of more than ₹7,000 per sq ft among the city’s four corners, the report noted.

As per the consultant, the average capital values are projected to witness a moderate appreciation of 10% across the city by the end of 2024, with prime locations and established tech corridors potentially experiencing steeper growth.

According to data shared by Anarock, by the end of H1 2024, the city’s available residential inventory stood at approximately 45,420 units, marking a 30% five-year decline over approximately 64,680 units by H1 2019-end. Moreover, inventory overhang in the city fell to a record low of 8 months by H1 2024-end, from 15 months in H2 2019.