MBRI index remains stable, recommends to go on rentals: Makaan.com Buy vs Rent Index (MBRI JFM 2015)
The MBRI for the period of Jan to Mar 2015 highlights the fact that most of the Indian cities property prices have skyrocketed making them fall in the rent category. This data depicts that currently India is a rent conducive destination, people should prefer to take a flat on rent rather than buying a property. For the same quarter in the last two year period i.e JFM 2013 and JFM 2015 the National MBRI index has remained stable at 28. Stability in the index could be due stability in property and rental rates in cities of India.
How to interpret MBRI Data:
MBRI of 1-20: This denotes that it is much less expensive to buy a home than to stay on rental, in these cities / sub-cities. Property seekers looking at investing here are advised to buy a property than staying on rentals.
MBRI of 21-25: This denotes that it is relatively more expensive to buy a home than to stay on rental, in these cities / sub-cities. This is a neutral range and property seekers looking at investing here are advised to take the final decision based on their financial situation.
MBRI of 25+: This denotes that it is much more expensive to buy a home than to stay on rental, in these cities / sub-cities. Property seekers looking at investing here are advised to rent a property rather than buying.
Makaan.com Buy vs. Rent Index (MBRI) for top Indian cities / areas (Jan-Mar 2013 to Jan-March 2015)
On analyzing the MBRI for Jan-Mar 2013 for almost all cities and sub-cities in India (see table), it can be observed that most of the Indian cities i.e Mumbai, Delhi, Hyderabad, Bangalore and Ahmedabad are preferred for Renting, whereas Chennai and Pune have moved to Neutral zone over the last two years; at present, there is no city in which Buying a property is advisable. While this scenario is applicable at the city level; there are areas or sub-cities within the main city where buying still make more sense. It is interesting to compare the 2015 data with Jan-Mar. 2013. In 2013, out of the 31 sub-cities, ten sub-cities were either in buying or neutral category; however, in Jan-Mar 2015 MBRI, only nine sub-cities fall under the buying or neutral category.
Read further to know more regarding MBRI changes on a city basis
MBRI analysis for Mumbai:
The MBRI index for the city of Mumbai has remained stable at 32 (Rent) over the last two years. The index highlights that the overall city is more conducive for renting. The stability in MBRI can be attributed to stability of overall real estate prices. This phenomenon can also be attributed to stable rental rates in the city.
According to the report, all the sub-cities of Mumbai i.e. Mumbai Andheri-Dahisar(32), Mumbai Beyond Thane(31), Mumbai Harbour(36), Mumbai Mira Road And Beyond (30), Mumbai Navi (30), Mumbai South (27), Mumbai South West (31), Mumbai Thane (37) are recommended for renting over buying. These sub-cities have an MBRI value of 25+ indicating that in these cities it is much more expensive to buy a home than to stay on rental.
MBRI analysis for Delhi NCR:
The MBRI for the city of Delhi NCR has has dropped one point from 37 (Rent) in Jan-Mar’13 to 36 (Rent) in the Jan-Mar’15 period. However, the capital city of India remains in the rental range. The drop in MBRI index can be attributed to softening in property prices in the certain pockets. Within the main Delhi city, all areas including Delhi East (44), Delhi North (46), Delhi South (34), Delhi West(43), Dwarka (57), Faridabad (29), Greater Noida (33) and Gurgaon (31) are in the rental range which means that it is far more expensive to buy a property in these areas than to stay on rental. However, the MBRI index shows that two sub-cities of Delhi fall in the neutral range. The index for Ghaziabad and Noida have remained stable at 24 and 22 respectively making it fall in the neutral category. In both these destinations people can choose to buy or rent, depending their financial condition.
MBRI analysis for Bangalore:
The index for the city of Bangalore has risen drastically from 21 (Neutral range) in Jan-Mar’13 to 28 (Rent) in Jan-Mar’15 respectively. This drastic shift in MBRI can be attributed to a skyrocketing property prices which makes investing in a property a bit more difficult. Overall the city remains to be a diverse destination as Bangalore Central (37) and Bangalore West (38) come in the rental category whereas Bangalore East (23), Bangalore South (23) and Bangalore North (21) fall in the neutral category.
MBRI analysis for Chennai:
The index for the city of Chennai has moved down from 26 (Rent) to 24 (Neutral) for Jan-Mar period in 2013 and 2015 respectively, making it fall in the neutral category by fraction of a margin. This drop in MBRI can be attributed to softening of property prices or rise in rental rates. Property seekers in Chennai South (34) should opt to rent whereas seekers in Chennai North (14) should buy a property.
MBRI analysis for Hyderabad:
The index for the city of Hyderabad has increased marginally from 24 (Neutral) to 27(Rent) for Jan-Mar period in 2013 and 2015 respectively. The rise in property prices has made the city’s MBRI index fall in the rental range. Property seekers in sub-city Hyderabad (26) and Secunderabad (27) people are advised to take a property on rent.
MBRI analysis for Pune:
The MBRI for the city of Pune has dropped sharply from 29 (Rent) in Jan-Mar’13 to 24 (Rent) in Jan-Mar 15 period. The drop property prices in Pune has made the city fall in the neutral category. Property seekers in Pune are advised to buy or rent a property depending on their financial condition,
MBRI analysis for Ahmedabad:
The index for the city of Ahmedabad has dropped drastically from 34 (Rent) in Jan-Mar’13 to 25 (Rent) in the Jan-Mar’15 period. However, even after a drastic drop the city still lies in the rental range. In the sub-city Ahmedabad West (28) investors are advised to go for renting rather than buying properties. However in Ahmedabad East (24), Ahmedabad North (22) buying a property will be more conducive.