The debate between renting vs buying a house in India is louder than ever, fuelled by YouTubers and financial influencers, who often label homeownership a “dead investment” while pushing for mutual funds or stock market investments. While these arguments hold some merit, they miss the unique emotional, cultural, and financial context of India, especially for first-time buyers. A home in India isn’t just a financial asset—it’s a symbol of stability, family pride, and long-term security. Here’s why owning a home in India, particularly for first-time buyers, remains a meaningful choice that
transcends the narrow lens of investment returns.
The Emotional and Cultural Significance of Homeownership
In India, owning a home is deeply woven into the cultural fabric. It’s a sanctuary where memories are made and personal identity takes root. It’s not just a place to live but a milestone that signifies success, security, and family legacy. The emotional weight of “apna ghar” (our own home) is unparalleled— whether it’s hosting festival celebrations, welcoming relatives during weddings, or creating a space for your children to grow. Renting, while practical for some, often comes with restrictions: landlords
dictating rules, no pets allowed, or the inability to personalize your space. The constant threat of eviction or rent hikes adds to the stress.For many Indians, a home is a source of pride and social standing. A 2022 survey by Housing.com found that 67% of Indians view homeownership as a key life goal, driven by emotional factors like stability and family aspirations. For first-time buyers, owning a home offers the freedom to create a space that reflects their values—be it a puja room, a balcony garden, or a kitchen tailored for family recipes. This emotional anchor is invaluable, far beyond the numbers of investment returns.
Long-Term Financial Benefits in the Indian Context
YouTubers often argue that renting frees up money for investments like mutual funds, which may yield 12-15% annual returns compared to real estate’s historical 8-10% in India. However, this comparison overlooks the long-term financial advantages of owning a home, especially in a country with rising property demand and limited land supply.
- Building Equity in a Growing Market: When you rent, your money vanishes monthly. With a home loan, each EMI builds equity in an asset you own. Indian real estate, particularly in urban centers, has shown steady appreciation. For instance, Knight Frank India’s 2024 report notes that residential prices in cities like Delhi-NCR and Bengaluru grew 10-15% annually in prime areas.
- Hedge Against Rent Inflation: Rent prices in India are soaring, especially in metro cities. A 2023 Anarock report highlighted that average rents in Mumbai and Bengaluru rose 20-25% post-pandemic. A fixed-rate home loan, however, locks in your housing costs, shielding you from such spikes. For example, an EMI of ₹40,000 on a ₹60 lakh loan remains constant, while rent for a similar property could climb from ₹30,000 to ₹50,000 in a decade.
- Tax Benefits: India offers generous tax incentives for homeowners. Under Section 24(b), you can claim a deduction of up to ₹2 lakh annually on home loan interest. Section 80C allows a deduction of up to ₹1.5 lakh on principal repayment. These benefits, unavailable to renters, reduce the effective cost of ownership. For a ₹50 lakh loan, tax savings could amount to ₹2.5 to 3 lakhs annually, making homeownership more affordable than critics claim.
- Forced Savings and Wealth Creation: In a country where financial discipline can be
challenging, a home loan acts as a forced savings mechanism. Each EMI builds your net worth, unlike rent payments. This is particularly relevant in India, where cultural priorities like weddings or education often divert savings. A home provides both shelter and a ttangible asset, unlike volatile mutual funds that require consistent discipline to outperform.
The Indian Reality: Why Home vs. Mutual Funds is a Flawed Comparison
Critics argue that mutual funds or stocks offer better liquidity and higher returns than real estate. While true in some scenarios, this comparison is misleading for first-time buyers in India. A home isn’t just an investment—it’s a dual-purpose asset that provides both shelter and potential appreciation. Mutual funds are important for wealth creation, but they’re not a substitute for a home – You can’t raise a family in a stock portfolio. For first-time buyers, the goal is to secure a home that meets your needs, not to chase the highest ROI. Once you’ve got that foundation, you can still invest in Mutual funds –
it’s a complementary strategy, not a competing one.
Addressing the Naysayers with an Indian Lens
YouTubers often highlight the downsides of buying: high EMIs, maintenance costs, and market risks.These are valid, but let’s contextualize them for India:
- High EMIs and Upfront Costs: Affordable housing schemes like PMAY (Pradhan Mantri Awas Yojana) offer subsidies of up to ₹2.67 lakh and lower interest rates for first-time buyers with incomes up to ₹18 lakh. Home loan rates in 2025 hover around 7.5 – 8.5% and most banks offer flexible tenures, making EMIs manageable. Down payments (10-20%) can be daunting, but savings or parental support—a common practice in India—often bridge the gap.
- Maintenance Costs: These are real but modest, averaging 1-2% of property value annually (e.g., ₹50,000-₹1 lakh for a ₹50 lakh home). In contrast, renters in many cities often pay maintenance fees societies, negating the “renting is cheaper” argument.
- Market Risks: Indian real estate, especially in Tier-1 and Tier-2 cities, is driven by urbanization and population growth. A 2024 CBRE report projects 7-8% annual price growth through 2030. Short-term dips are possible, but long-term holding mitigates risks. Renters, meanwhile, face no such upside, only rising costs.
- Cultural and Lifestyle Fit: Renting suits young professionals in India’s gig economy, but for those planning families or seeking stability, ownership aligns with cultural values. A home near parents or in a familiar community strengthens social bonds, a priority for many Indians.
A Personal Perspective for Indian First-Time Buyers
If you’re a first-time buyer in India, don’t let the “dead investment” rhetoric cloud your judgement. A home is more than an asset—it’s not only a shield against rent volatility but it’s also a legacy, a place to live, love, and grow. The emotional joy of owning your space, coupled with financial benefits like equity and tax savings, makes it a cornerstone of your future. Financially, it’s a long-term play that builds wealth while providing a roof over your head. Moreover, the “dead investment” narrative ignores the hidden costs of renting, brokerage fees, security deposits, and the hassle of frequent relocations. Beyond rent hikes, renters face opportunity costs: no equity, no tax breaks, and no control over their living environment. Mutual Fund, on the other hand can’t replace the utility of a home you live in. For someone without a home, the priority isn’t maximizing returns—it’s securing a stable foundation. It’s not an either-or choice.
