Rent or Buy a House? Location-Based Decision-Making Primer

In an interaction with Jaipriya, Assistant Editor at Homes India Magazine, Dr. Prashant Thakur, Executive Director & Head – Research & Advisory, ANAROCK Group shares his valuable insights on deciding whether to rent or buy a home in India, helping you make smart, location-based decisions to secure the best value and lifestyle for your needs.

Prashant's areas of expertise include setting up business verticals in business research, market intelligence, and strategic advisory. He has worked extensively across multiple sectors, including financial services, real estate investment, and consumer business.

The decision to rent or purchase a residential property in 2025 has become increasingly location-dependent, according to new research from Anarock Group. Market analysis reveals significant variations in property price appreciation versus rental income growth across India's top seven cities between 2021-end and 2024-end.

 Key Market Trends by Region

Capital Appreciation Leaders: Major metropolitan areas including Bengaluru, Mumbai Metropolitan Region (MMR), Delhi-NCR, and Hyderabad experienced higher capital appreciation compared to rental appreciation during the three-year period. These markets favour property purchase for long-term wealth creation.

Rental Growth Markets: Conversely, specific localities within Pune, Kolkata, and Chennai witnessed rental values increasing at a faster pace than property prices, making these areas more attractive for rental-focused investors.

Also Read: Understanding Hidden Costs When Buying an Apartment in India

Markets Where Capital Values Outpaced Rental Growth

• Delhi-NCR: Sohna Road demonstrated capital value appreciation of 59 percent while rental values increased by 47 percent. The most dramatic growth occurred in Sector-150, Noida, where capital values surged by an extraordinary 128 percent compared to rental growth of just 66 percent.
• Mumbai Metropolitan Region: Chembur experienced capital value growth of 48 percent against rental appreciation of 42 percent. Mulund showed an even wider gap, with capital prices rising 43 percent while rental values increased only 29 percent.
• Hyderabad: HITECH City recorded capital appreciation of 62 percent versus rental value growth of 54 percent. Gachibowli performed even better, with capital values rising 78 percent compared to rental increases of 62 percent.
• Bengaluru: Thanisandra Main Road saw capital values appreciate 67 percent while rental values grew 62 percent, favouring buyers. However, Sarjapur Road bucked this trend with rental values increasing 76 percent compared to capital appreciation of 63 percent. 

Markets Favouring Rental Income Growth

• Pune: Hinjewadi experienced rental income growth of 57 percent while capital values rose only 37 percent. Wagholi showed similar dynamics with rental growth of 65 percent against capital appreciation of 37 percent.
• Kolkata: EM Bypass recorded rental value appreciation of 51 percent compared to capital growth of just 19 percent. Rajarhat saw rental values increase 37 percent while capital appreciation reached 32 percent.
• Chennai: Pallavaram demonstrated rental value growth of 44 percent against capital appreciation of 21 percent. Perambur recorded rental increases of 36 percent compared to capital growth of 23 percent

Investment Implications

Property investors must adopt location-specific strategies more than ever before. Those looking for long-term real estate investment can target markets with high appreciation, while rental-focused investors should zero in on localities where rents are rising steadily.

The research emphasizes that homebuyers should carefully evaluate property price trends against rental income growth patterns to determine the most financially advantageous option for each specific location. This data-driven approach ensures informed decision-making in an increasingly complex real estate landscape.

Also Read: Tap to Tour: How AR/VR Are Redefining Home Buying in India

Future Outlook

The divergent trends across Indian cities reflect varying economic drivers, infrastructure development patterns, and demographic shifts. Technology hubs like Bengaluru and Hyderabad continue attracting professionals, driving both rental and purchase demand, while established financial centers like Mumbai maintain strong capital appreciation momentum.

For prospective property decisions in 2025, the key lies in understanding these micro-market dynamics rather than applying broad generalizations about rent versus buy strategies across different urban centers.