Middle class trap? Analyst says buying a home in Mumbai or Bengaluru may ruin you

Buying a home in India's top metros may no longer be the golden ticket to wealth. In a LinkedIn post, financial analyst Sujay U argues that renting, not owning, offers stronger financial and lifestyle returns for today’s urban Indians.

Sujay U's data-backed post dismantles the popular belief that property ownership equals long-term wealth, particularly in cities like Mumbai and Bengaluru, where real estate prices have surged far beyond affordability metrics.

“In Mumbai, a 2 BHK today costs ₹2.0–2.2 crore; in Bengaluru, it’s ₹1.2–1.4 crore,” he notes. Compare that with average household incomes of ₹20–30 lakh annually, and homes now cost 8–12 times a family’s earnings — far above the 3–5× global affordability benchmark.

The result? Homebuyers are trapped in what Sujay calls the “EMI trap.” For a ₹2 crore Mumbai flat, the EMI runs over ₹1.4 lakh a month — consuming 50–70% of a household’s income. “Globally, financial planners recommend keeping housing costs under 30%,” he warns.

Beyond affordability, Sujay points to lackluster returns: Mumbai property prices actually declined 1% from 2013–2023, per major research. Nationally, real prices have grown just 3% a year since 2010. Meanwhile, rental yields hover at just 2% — among the world’s lowest.

“You’re not building wealth,” he argues. “You’re losing flexibility, mobility, and investing power.”

He highlights young renters in Bengaluru’s Whitefield who invest the difference into SIPs and end up with significantly more wealth over two decades than peers saddled with oversized mortgages.

With 40% of urban Indians under 35 preferring to rent, Sujay concludes with a checklist for aspiring buyers: “Ask yourself, is the EMI eating up your income? What’s your real return? What freedom are you giving up?” .