Owning property in India’s busy cities might not build wealth like before. For many Indians, a house means success and safety. It’s often a big part of family talks and money plans. But for the middle class, this emotional choice costs a lot. This is especially true with long home loans.
We all love owning a home. But we need to think about the money side. Property might not grow your money as much now. It hasn’t always been a top performer. Even in the past, property gains in India were often around 8-9% yearly. Big gains over time often come from holding property for ages, not from rapid growth.
Is it Love or a Money Trap?
Look at Rohit, a 34-year-old in Pune. He saved hard. Then he got a loan for 70 lakhs to buy a flat costing 90 lakhs. His loan had an 8% interest rate over 20 years. His monthly payment was about 58,551. His take-home pay was 1.25 lakhs. This means almost half his salary goes to loan payments for 20 years.
By the loan’s end, Rohit paid 1.41 crore in total. Over 70 lakhs of that was interest. Meanwhile, his flat’s value barely increased. It’s now worth about 1.1 crore. That’s a small gain over 20 years.
What if Rohit put 58,551 each month into a mutual fund? If it grew 12% yearly, he’d have 5.85 crore after 20 years. That money is easy to access and doesn’t need upkeep. Fixed deposits or liquid funds offer safety. But they earn less, around 2.5–2.9 crore. This is less than needed to beat rising prices. Rohit’s flat, worth 1.1 crore, shows property lags behind other investments.
This happens a lot. People buy homes for emotional reasons. Social pressure or the dream of owning a home can cloud judgment. Some buy houses in many cities. Then they rent a third home for work or school. This ties up money in property they don’t use much.
Rich People Benefit, Not the Middle Class
The story changes for very wealthy people. Buying property makes sense for them. But the reasons are different.
Wealthy people usually:
- Buy without loans, so no interest costs.
- Have many different investments. Property is just one part.
- Buy for status or luxury, not just for profit.
- Can handle market drops because they have extra money.