Deepak Shenoy is the founder and CEO of CapitalMind
For many people, buying a house is the ultimate dream and one of life's biggest goals. However, property prices and rentals have gone up significantly across major Indian cities in the last five years, denting people's dreams. Recently, Bengaluru topped the list as the hottest residential market in the country, a Bloomberg report said.
Sharing his thoughts on the issue, founder and CEO of CapitalMind Deepak Shenoy, who is based in Bengaluru, called houses ''terrible investments,'' adding that most people purchase property because they want a ''warm fuzzy feeling of ownership.''
''This buy vs rent will never go away, as if its some kind of religion. No one cares. Most people want that warm fuzzy feeling of ownership, so buying is good. Like a car,'' he tweeted. He further said that some people confuse buying houses with investments, but ''houses have mostly not worked out well in the last decade financially.''
''Houses are terrible investments, like most cars; but that is overshadowed by the warm fuzzy feeling of ownership, most of the time. This includes the ability to change the structure of your house the way you like it, to apply for passports with a "permanent" address, to not have to deal with rentals and brokers, etc,'' he said.
See the tweet here:
He then explained how the same logic applies to buying luxury cars.
''You can never justify why a Mercedes (or a Porsche) is a great idea, but they are not evaluated on boss what crap mileage it gives, and boss big deal you could take Uber and it would be cheaper forever. It's evaluated on Frik, I own a goddamn Mercedes. That warm fuzzy feeling justifies any darn EMI, but only if you can afford it,'' he added.
Mr. Shenoy's tweet has now triggered a debate and received mixed responses. One user said, ''Perspective is always great, but not a blanket statement. Might be detrimental to those folks who get "influenced.''
Another commented, ''Totally agree. Humans are irrational and constantly jostling for status and identity. That's why we still buy real gold jewelry or use fragile glass utensils.''
A third said, ''One needs to look at homeownership beyond investment. Homeownership is good for the economy. Homeowners (1) demand higher quality home goods, (2) seek stability & (3) invest in children. For India to grow it is essential to provide affordable housing for young couples.'' A fourth added, ''The endless debate. I know a couple very comfortable renting. Another with unwell parents living with them preferred buying. There is no right or wrong. Just do what works for you.''
A fifth summed the buy vs rent debate, by saying, ''This. It's a Apples vs Oranges comparison. Each to their own, whatever you find happiness in.''