5 Affordable cities to buy or rent a house in India

We take a look at five major cities in India where it is both affordable and wise to buy or rent a property today.

5 Affordable cities to buy or rent a house in India

Many of us have been faced with the dilemma of whether it makes more financial sense to buy a house or rent one instead. Here, we have compiled a list of five cities where it is quite affordable to do either of the two.

1. Indore, Madhya Pradesh

Real estate has seen a big boom in Indore of late. With diligent planning backed by the city government, Indore offers some of the most affordable integrated townships in our country with prices that just can’t be matched. Let’s look at some reasons for Indore’s appeal:

Climate can be a major factor when it comes to the comfort and quality of life. In Indore, it’s just perfect – neither too hot nor very cold. When it comes to infrastructure and academics, it has the best to offer and can give any city in India a run for its money.

What’s more, Indore has constantly ranked as one of the safest cities in India. Crime against women is especially low.

Related: A look at the different stamp duties across Indian states

2. Jaipur, Rajasthan

Jaipur is an ideal place for owning or renting a property. Buying a house in Jaipur is much more affordable than in any of the other metros. The unique vibe of this city cannot be replicated elsewhere. Couple that with the benefits Jaipur provides and what you are left with is a winning formula:

Although the city’s economy is driven largely by tourism, the cost of living is still pretty low. Consider this: the cost of living index in beautiful Jaipur is 8.46% lower than in Noida. A rich culture adds to the quality of life enjoyed by its inhabitants. 

Renowned educational institutes, top-notch healthcare, a strong industrial presence, and the level of purity in the air only add to the standard of living in Jaipur.

3. Ahmedabad, Gujarat

The real estate market is small in Ahmedabad when compared to some other big cities but that doesn’t make it any less affordable to live in. Here are some factors that tilt the scales in Ahmedabad’s favour:

Ahmedabad is in a modern state with its heart still steeped in tradition. As a result, people get to enjoy the best of both worlds. It is also an educational hub that has some top colleges and universities of India: IIM-A, NID, MICA, IIT, GNLU, just to name a few. 

Driven by oil, gas, energy, petrochemical, and automotive industries, there are numerous residential properties to be had in this city at highly competitive prices.

Related: How much do you know about buying a home?

4. Kochi, Kerala

A large chunk (an estimated 60%) of the residential real estate market in this pleasant coastal city is currently dominated by the affordable housing segment. Some good things going Kochi’s way are:

The arrival of the Metro has made travelling around the city both affordable and convenient. With a booming IT sector at its centre, Kochi has managed to create thousands of jobs in recent years, which provide quality of work life. It is also Kerala’s commercial capital.

The city enjoys a vibrant environment of art and culture through its many entertainment areas and recreational parks.

5. Hyderabad, Telengana

A tier-1 city that boasts of world-class infrastructure, Hyderabad is well on its way to becoming the preferred destination for people who want a decent quality of life. Here are some attractive reasons why one should consider living in Hyderabad:

It is generally considered to be a friendly and peaceful city that promotes safe living. A uniquely positive thing about Hyderabad is that the population is divided evenly inside the city so there’s hardly any traffic congestion or ‘rush hour’ in the mornings and evenings.

The availability of good schools, low pollution levels, and a thriving job market are some other factors that make Hyderabad one of the best Indian cities to live in.

Related: RERA Act 2016: What are my rights as a homebuyer? 

Buy or rent: Which is a better?

Apart from the total income of a family, another good determiner worth considering when deciding to buy or rent is ‘urgency to buy (UTB)’ – a ratio that compares the average monthly cost of rent with the average monthly cost of buying in terms of Equated Monthly Instalments (EMI). If the ratio is too high, it indicates that buying is the better option; whereas if the ratio is low, renting is the way to go. For all the cities featured on this list, the UTB ratio is neither too high nor too low.

City Average Monthly Rent (INR) Average EMI (INR) UTB Ratio
Indore 11,660 25,885 0.450
Jaipur 14,771 36,974 0.400
Ahmedabad 15,446 39,106 0.395
Kochi 15,005 42,027 0.357
Hyderabad 16,795 42,995 0.391
Delhi 23,264 75,665 0.307
Chennai 21,018 68,998 0.305
Mumbai 44,041 1,86,611 0.236

Source: Arthayantra Buy Vs Rent Report 2019

As you can see, the average monthly rent and average monthly EMI is significantly higher in the 3 metros. So, buying a house or renting one are both viable options in the 5 affordable cities mentioned in this article. Ultimately, it all boils down to personal preferences and availability of funds. Are you all set to invest in real estate? Here are a few things you must know.