Why Buying a ₹3 Crore Home in India is a Poor Investment: Expert Breaks It Down
Wealth advisor Parag Aggarwal explains why buying a ₹3 crore home in India is more of a financial burden than an investment, with total costs over 15 years reaching ₹4.5 crore and offering weak returns compared to other asset classes.
Real EstateInvestmentFinancial AdviceAsset AllocationPropertyReal Estate NewsJun 04, 2025
Aggarwal breaks down the real cost: over 15 years, the total outflow through EMIs and interest stretches far beyond the sticker price. “A ₹3 crore house doesn’t cost ₹3 crore,” he notes. “That’s what you will pay over 15 years…as EMIs and interest.”
More concerning, he argues, is what buyers get in return: modest appreciation of around 4–5% annually, plus an optional 2–3% in rental yields—far below the performance of other investment classes. Gold has averaged returns of ~11.6% over 15 years, while Indian equities have delivered ~13.7%.
“Real estate has been a laggard,” Aggarwal writes, noting that these returns don’t account for maintenance costs, property taxes, or the liquidity challenges of selling a home when needed.
Yet, despite these figures, homeownership remains a cultural expectation. “Renting means you’re not stable,” he says, citing common social pressures to buy property before marriage or as a marker of adulthood.
Aggarwal, who owns a home himself, is candid about his motivations. “My wife and I knew it was an emotional decision, NOT a financial one,” he writes. They prioritized peace of mind over investment logic, paying off their home loan early—not for returns, but for psychological comfort.
For his clients, however, he urges caution. He advises against early-stage home buying, particularly when it risks skewing asset allocation. “Very, very carefully,” he emphasizes.
Real estate, he argues, should come late in the investment journey, once equities, gold, and other liquid assets are well-established. “Else Real Estate will end up being 70–80% of your portfolio,” he warns.
His conclusion is clear: a house you live in isn’t an investment. “Remember—if you are staying in it—your house is an item of ‘consumption’, not an investment.”
Frequently Asked Questions
What is the total cost of a ₹3 crore home over 15 years?
The total cost of a ₹3 crore home over 15 years, including EMIs and interest, is approximately ₹4.5 crore.
What are the typical returns on real estate compared to other investments?
Real estate typically offers modest appreciation of around 4–5% annually and optional 2–3% in rental yields, which is far below the performance of other investment classes like gold (11.6%) and Indian equities (13.7%).
Why is homeownership still a cultural expectation in India?
Homeownership remains a cultural expectation in India due to social pressures, such as the belief that renting means instability and the expectation to own a property before marriage or as a marker of adulthood.
What is Parag Aggarwal's personal stance on homeownership?
Parag Aggarwal, who owns a home himself, acknowledges that his decision was an emotional one for peace of mind, not a financial investment.
When should real estate be considered in an investment portfolio?
According to Aggarwal, real estate should be considered late in the investment journey, after establishing a strong portfolio of equities, gold, and other liquid assets.
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