Cheaper to rent flat than pay purchase costs: Report
While it is a known fact that property prices in Mumbai are the highest in the country, a new report by a London-based realty research firm shows the city has the highest transaction cost in relation to its rents on a global scale.
Transaction cost refers to taxes and levies that a buyer has to incur even before taking into account the actual price of buying a property. Since these taxes are a percentage of the property cost, the high transaction cost is indicative of unusually high capital value of property. According to the World Cities Review by realty agency Savills, it takes 4.3 years in rented accommodation in Mumbai before the cumulative cost of rent exceeds the transaction costs alone of buying that property. Of all the 10 global cities detailed in the report, this is the longest in terms of number of years.