Same flat · same city · one generation
Your father bought his flat in 2003 for eighteen times his monthly salary. The same flat — same city, same size — is being sold to you for seventy-two times yours.
Nobody planned this. It isn’t your generation being lazy with money; it’s the arithmetic of two numbers moving at very different speeds for twenty years. Worth sitting with before you sign a 20-year loan over it.
A software engineer in Bengaluru earning ₹25 lakh a year, looking at a ₹2 crore 2BHK in Whitefield, is looking at roughly 72 times his monthly salary. The EMI on that, at 9% over 30 years, comes to about ₹1.3 lakh a month — close to 70% of his take-home before groceries.
His father bought a comparable flat, same city, in 2003, at 18 times his own monthly salary. Same city, same size, four times the multiple.
The gap isn’t mysterious once you put the two growth rates side by side.
| Metric | 2019 | 2024 |
|---|---|---|
| Average price (₹/sqft) | ₹5,600 | ₹7,550 |
| Change | +50%+ over 5 years | |
| Salary growth (annual) | 8–10%/year | |
Property compounded faster than pay for five straight years. Compounding is patient; it doesn’t care whether the underlying asset is a stock or a 2BHK.
If salaries can’t keep up, the marginal buyer at ₹2 crore isn’t a salaried Indian at all. Two groups matter most.
NRIs earn in dollars, pounds, dirhams — a ₹2 crore flat is roughly $25,000 to someone paid outside India, and they’re not underwriting it against Indian rental yield. Industry estimates put NRI purchases at 15–20% of transactions in micro-markets like Whitefield, Powai and Gurgaon, up from single digits a decade ago. Institutional buyers — PE-backed platforms, real estate funds, corporates buying units in bulk — are the other side of it, with return horizons measured in decades and no need to ever live in the flat.
Neither group is pricing the flat the way a person who has to make the EMI every month would.
Take a ₹1 crore flat. 20% down — ₹20 lakh from your own pocket. ₹80 lakh loan at 9% over 20 years. EMI: ₹72,364.
That’s not the full cost. Add roughly ₹73 lakh in interest paid to the bank over 20 years, plus another ₹35 lakh in property tax, maintenance, society charges and repairs at ordinary rates. Total outlay: about ₹2.3 crore for a flat that, at a conservative 4.5% annual appreciation, is worth about ₹2.32 crore by the end.
Now run the same 20 years for someone renting the identical flat at ₹30,000 a month, with rent rising 10% a year — about ₹2.04 crore paid out over two decades, with nothing to show for it at the end. Except the renter wasn’t sitting on the ₹20 lakh down payment, and every month the gap between what the buyer’s EMI would have been and what rent actually cost went into a SIP instead.
| Buyer | Renter | |
|---|---|---|
| Total paid over 20 years | ~₹2.3 Cr | ~₹2.04 Cr |
| What they hold at year 20 | Flat worth ~₹2.32 Cr | Portfolio ~₹2.5 Cr |
| Net gain | ~₹2 lakh | ~₹50 lakh |
The renter comes out around ₹48 lakh ahead. Not because renting is virtuous — because capital that isn’t locked into a down payment and a 20-year amortization schedule gets to compound somewhere else instead.
None of this is an argument for renting forever — that’s the kind of internet take that sounds sharp and ages badly. It’s an argument for knowing what you’re actually signing.
A home loan isn’t only an EMI. It’s a 20-to-30-year commitment to a city, a job, and roughly whatever salary band you’re on right now. In the first five years, 75–83% of every EMI is interest, not principal — you own very little of the flat for a long time before you own most of it. You will very likely buy a home. The question worth separating out is whether it happens at 27, at 72 times your salary, before you’ve checked whether the rest of the math survives it.
Before signing anything, this takes about sixty seconds against last month’s bank statement:
If those four don’t add up cleanly, the loan on the table is a guess dressed up as a decision — worth knowing before the registration fee, not after.
This is the exact audit TLDR is built to run automatically. It reads your transaction alerts (read-only, never write access), rolls up your net worth, and shows what percentage of your income is already committed before you add a new EMI on top — alongside your projected FIRE date. One subscription, no ads, no loans sold on the side.
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Individual circumstances vary considerably — city, tax position, job security, interest rates and how long you actually plan to stay put all change what the right call is. This is an explanation of how the arithmetic works, not a recommendation about your own money.
A common lender benchmark: EMI shouldn’t cross 40–50% of take-home pay — the same Fixed Obligation to Income Ratio covered in our EMI-to-income ratio explainer. A rougher shortcut some calculators land on: a loan of about 60 times your monthly take-home, at current rates and a 20-year tenure, keeps the EMI inside that band. Neither number accounts for your other EMIs, rent if you’re not selling, or your SIPs — treat it as a ceiling, not a target.
It depends on the city and the price relative to rent, not on buying versus renting as categories. Run on a representative ₹1 crore flat at a conservative 4.5% annual appreciation, buying and renting-plus-investing land close together, with renting slightly ahead once the down payment and the EMI-rent gap are actually invested instead of spent. Push the assumed return from a conservative 10% to a still-realistic 12% and renting pulls further ahead. That’s not an argument against ever buying — it’s an argument for running your own numbers first.
Rental yield — annual rent divided by property price — sits at roughly 2–3% in Mumbai, Bengaluru and the NCR, among the lowest in the world, against a fixed deposit paying close to 7%. Prices in these markets are increasingly set by buyers who aren’t optimizing for rental income at all — NRIs treating a flat as a dollar-denominated store of value, and institutional buyers with multi-decade horizons. Yield reflects what a flat is worth to someone who has to live off it; the sale price increasingly reflects what it’s worth to someone who doesn’t.
Stamp duty (5–7% of property value, depending on the state), registration (roughly 1–2%), GST on under-construction property (5%, or 1% for affordable housing), TDS of 1% on transactions over ₹50 lakh, and brokerage (typically around 1%) all land before you get the keys. After that, property tax, society charges and maintenance run every year you own it. None of this shows up in the EMI figure a bank quotes you.
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