Time To Buy & Not Rent? Zerodha Co-Founder Explains Why House Rents May Rise Further In India
Calling the sudden spike in house rents in India a short term phenomenon, Zerodha's co-founder, Nikhil Kamath, has said that if the stark mismatch between the trend of buying and renting houses needed to reach an equilibrium, he would bet on the former.
Less than a month after joining Forbes World's Billionaires List this year with his brother Nithin Kamath, Zerodha's co-founder Nikhil Kamath has re-ignited the buy vs rent debate. In a recent tweet amid soaring rents in India, the billionaire explained the reason and also backed it up with data.
What Nikhil Kamath Tweeted
indiatimes
Nikhil Kamath said in his tweet that if the mismatch between the trend of buying and renting houses needed to reach an equilibrium, he would bet on the former.
Looks like a short-term phenomenon; as long as you can #rent at 3 per cent and #housing loan rates are over 8 per cent, this won't work. If I had to bet on house prices going down vs rent going up to reach equilibrium, my bet is still on the former.#realestate #rentindia pic.twitter.com/3WydeTlDba
¡ª Nikhil Kamath (@nikhilkamathcio) April 26, 2023
¡°Looks like a short-term phenomenon; as long as you can #rent at 3 per cent and #housing loan rates are over 8 per cent, this won't work. If I had to bet on house prices going down vs rent going up to reach equilibrium, my bet is still on the former," he tweeted yesterday evening.
The main reason behind the rising house rents in India is the large imbalance in demand and supply for living spaces post COVID. The existing supply of living spaces in the metro cities has been insufficient to match the sudden surge in demand for rented houses after the pandemic, said the data shared in his tweet.
Also Read: 52% Millennials Prefer Real Estate As Investment: Survey
Time To Choose Buy Option Vs Rent?
indiatimes
His tweet also mentioned that recent trends point towards rising rents in coming years. "While majority opinions (used to) favor the rent option in previous 'rent vs buy' debates, can we expect a paradigm shift ahead?"
His tweet also mentioned that unsold residential properties in India in 2022 were at the lowest since 2014. And the demand for residential properties is at a decade-high now.
Also Read: 'Houses & Cars Are Terrible Investments,' Bengaluru Based CEO's Tweet Sparks Debate
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