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Why real estate is still the most reliable investment in India?

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Why real estate is still the most reliable investment in India?

  • 27 Jun 2023

In India, investing in real estate has traditionally been a safe and low-risk option. When it comes to asset building, it has always been the top option for investors with a lower risk tolerance. Real estate is still a better choice than equity shares when it comes to market volatility and turmoil brought on by COVID. However, there has been an impact since 2020 for a year or two, but it gradually increased and has now practically reached pre-covid levels.

With so many MNCs and manufacturing firms establishing bases in India, the potential for investors in residential and commercial real estate is undoubtedly limitless. The tax exemption it offers in the case of housing loans is the most crucial component, and the rate of returns is also steady. Let's look more closely at the elements that make real estate a safe investment in India. 

Real Estate Investment in India - Buyer’s Market

Although the COVID-19 pandemic was an unexpected disaster, it caused a correction in real estate values and gave prospective homeowners the information they needed to make an educated choice. In the past year, there has been an increase in demand for ready-to-move-in dwelling units across the metro areas due to extended work from home arrangements and the requirement for online education. Whether they are first-time homebuyers or seasoned homeowners looking for a larger area, buyers prefer ready-to-move-in residences and are leery of making investments in under-construction ones. 

The recovering housing market in India has also been aided by factors like historically low home loan interest rates, stamp duty reductions by several States like Maharashtra, and alluring incentives extended by numerous developers on completed apartments. 

The Reserve Bank of India's Financial Stability Report (FSR) said that the number of unsold residential property units decreased to roughly 7 lakh units in March 2021 from 8.50 lakh units in the first quarter of 2020, indicating a further improvement in house sales. The Anarock real estate research report supports the idea that the top seven metro areas' sales momentum has surged by 93% annually.

Real Estate Investment in India - Long Term Growth

One of the main factors contributing to investors' attraction to the real estate market is the fact that only a building's value declines, whereas a land parcel's value increases at a rate that is significantly faster. If investors have extra cash, they would choose to purchase land instead of making paltry investments in fixed deposits. Additionally, rising real estate investment is fueling expectations of strong price growth.

If historical data is referred to, it can be observed that the real estate sector grew by 11.2 percent from the fiscal year 2005 to 2020.

Unlike other market-linked investment options such as stocks and mutual funds, investment in real estate comes with a low volatility quotient. Being a tangible asset, it is still one of the safest investment options in India.

Real Estate Investment in India - Source of Passive Income

Earning passive rental income from their property investments is a key goal for real estate owners. However, the rental revenue varies depending on the city, region, demand, and property type. Residential properties often have a lower rental yield than commercial assets. Numerous chances exist in top metropolises like Mumbai, Delhi, Bangalore, Hyderabad, and Kolkata to generate rental income via farm leases, commercial leases, and student housing.

A property also carries an emotional importance in India and is seen as more than just a means of investment. In addition to the growing and passive income prospects, one can always use a property as collateral with the bank and easily raise loans against it for things like a company loan or an education loan.

Real Estate Investment in India - High ROI 

It is frequently observed that the profits from real estate investments are significantly larger than the rate of market inflation. Consequently, we can give you a better return on your investment and a higher profit. Compared to other investment possibilities, real estate investments are thought to be more lucrative because the risk is generally lower. Additionally, investing in residential, commercial, or industrial real estate is quite advantageous for people because many state governments offer rebates on stamp duty and registration fees. Real estate is also a physical asset that gives investors a sense of security because it offers that. 

Wrapping up on Real Estate Investment in India

In conclusion, there is no investing opportunity that is "one size fits all." Before making a choice, the investor must assess their risk tolerance and investment horizon. Calculate the results and rely on expert guidance. To track pricing and make a wise investment choice

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