Is Buying a Home in Major Indian Cities a Financial Mistake? Financial Advisor Explains
Financial advisor Lovish Anand argues that buying a home in high-cost Indian cities like Mumbai and Delhi-NCR requires over 30 years to break even, making renting a more financially viable option.
Real EstateProperty InvestmentFinancial AdviceRental YieldsBreakeven PeriodReal Estate MumbaiJun 18, 2025
According to Anand, these cities require homeowners to stay put for over 30 years just to break even, substantially lengthening the financial commitment. “That’s not an investment,” Anand wrote in a LinkedIn post. “That’s a slow bleed.”
The root of the issue lies in exorbitant property prices paired with rental yields that are often below 2%. This combination makes renting a financially appealing option compared to buying. In contrast, cities such as Bengaluru, Hyderabad, Thane, Kolkata, and Chennai present a more favourable scenario, where rental yields exceed 4% and breakeven periods for buying can be as short as 3 to 8 years, especially for two-bedroom units.
“The numbers don’t lie,” Anand noted. “In cities where rent is just 2–2.5% of the home’s price, buying makes little sense unless you’re locking in for life.”
Anand highlights that this insight should prompt a reevaluation of the age-old view that renting is merely money wasted. His advice is to critically assess the financial implications rather than relying on traditional beliefs. “Don’t buy because your uncle said so. Don’t rent because it feels safer. Run the numbers. Know the breakeven. Think long term before you lock in,” Anand said.
The emotional appeal of homeownership often overshadows the stark financial realities, according to Anand. This sentiment is further bolstered by a comparative study conducted by 1 Finance, which analyses various financial factors such as EMIs, stamp duty, and opportunity costs. “Real estate isn’t about emotions,” he concludes. “It’s about math.”
Anand's message resonates strongly with those reconsidering their financial priorities in rapidly evolving urban landscapes. He states, “Your dream home could be your worst investment depending on the city,” highlighting how location significantly influences the financial outcome of property ownership.
In his full LinkedIn post, Anand expands on these insights, cautioning against outdated advice such as “Buy a home as soon as you can. Rent is just money down the drain.” Instead, he suggests potential homeowners should focus on the financial data before making decisions.
Frequently Asked Questions
What is the main argument against buying a home in high-cost Indian cities?
Financial advisor Lovish Anand argues that buying a home in high-cost cities like Mumbai and Delhi-NCR requires over 30 years to break even, making it a slow financial return compared to renting.
Why are rental yields important in the decision to buy or rent?
Rental yields are crucial because they indicate the financial return on investment. In cities with low rental yields (below 2%), buying a home is less financially viable compared to renting.
What cities are more favorable for property investment according to Anand?
Cities such as Bengaluru, Hyderabad, Thane, Kolkata, and Chennai are more favorable for property investment due to higher rental yields (exceeding 4%) and shorter breakeven periods (3 to 8 years).
What advice does Anand give to potential homeowners?
Anand advises potential homeowners to critically assess the financial implications, run the numbers, know the breakeven period, and think long term before making a decision to buy or rent.
How does Anand describe the emotional appeal of homeownership?
Anand notes that the emotional appeal of homeownership often overshadows the stark financial realities, emphasizing that real estate decisions should be based on math rather than emotions.
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