Online brokerage platform Zerodha’s co-founder Nikhil Kamath on Wednesday shared his insights on the current housing market in India. Kamath, who along with his brother Nithin is worth $3.45 billion as per Forbes, questioned why would anyone buy a 1,000 square feet apartment in Mumbai when it can be rented at 3 per cent of the price.
“The housing market in India currently looks something like this. Interest rates are going up(a lot, significantly higher EMIs) with an ageing population, fertility rates below replenishment in most states (avg. age will go up with time, older people need lesser space)”, he tweeted.
Pointing out that the residential rental yield is 3 per cent which is nowhere near beating inflation, Kamath said that whenever the black money problem is resolved in India, the housing market will be most affected.
“Real Estate as an asset class becomes illiquid quickly, if you and a few around you sell together”, Kamath tweeted.
“Why then does a 1000 sqft. apartment still cost so much in Mumbai? And why would you buy, if you can rent at 3 per cent…” he questioned.
Nikhil Kamath’s viral tweet comes days after his brother Nithin shared insightful tips on financial planning for the millennial and Gen Z investors to ensure a secure retirement life.
In a Twitter thread, Nithin Kamath had advised youngsters against taking loans, start saving early, get a comprehensive health insurance policy, ensuring a coverage for the dependents. He said that the technological advancements had led to the retirement age being reduced to 50 and medical facilities raised the life expectancy to 80. As a result, the youngsters need to plan better for the life between 50 and 80.