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Is real estate the right investment option versus others

The COVID -19 pandemic has hit the world hard, both in terms of lives and livelihood. People are stuck in their homes with Internet and news being their only sources of interaction with the outside world. Businesses have crumpled. The times are such that most investment instruments like stock market, gold, fixed deposits and other saving schemes are fetching very low returns. This recent phenomena of high risk and uncertainty has turned out to be fruitful for the real estate sector. Investors who have always been looking for investments that pay higher yields in the medium-to-long term are starting to consider real estate sector as a viable option.

 All that investors care about is return and safety of their investment. But with capital appreciation added to it, investment in real estate has become lucrative, opportune and credible. The investors with a foresight of market have already started moving their funds to real estate. As a result, projects of reputed developers are fast finding investment; and the recent increase in investment from Gulf countries into real estate have presented developers with not just liquidity but also validation of real estate being a safe and lucrative investment option.

The lockdown period is also witnessing other set of people apart from investors who are coming forward to invest in realty — end-users and first time buyers. With home loan interest rates at their historic low, the last time in 2003-04 home loan rates stood close to 7%, and government’s incentives have proven to be a good time for this segment to invest in homes. The apex bank has also announced infusion of another 1 lakh crore in All India Institutional Finance and NBFCs including Micro Finance Institution. All these measures will aid in bringing back liquidity into the system. The investment in realty is anyway a well-thought out decision, and property market being largely influenced due to change in interest and loan rates will see a change in the pattern of investments made.

The realty sector has not seen a sharp increase in prices in the last few years even amid inflation and rising cost of raw materials. Moreover, with other investment instruments fetching below par returns, homebuyers are looking at realty market for a variety of reasons, including rental income. To add to it, the discounts and offers make it all the more lucrative.

The real estate sector takes care of the basic needs of the citizens and there will always be a demand for it. With India’s increasing population and economy growing, the sector is on its path of being a reliable investment tool generating good returns. Investors have realized the utility of investing in real estate assets with the assurance of a stable long-term ROI and capital appreciation. Realty may now see an influx of people ready to buy smaller units as their first investment for creating a future asset, the continuation of this trend for several years post COVID rings positivity for the entire sector and its allied industries.

POINTS

Return on investment from other investment tools at a low, thereby making real estate a reliable investment option.

The declining lending rates coupled with government incentives and a stable real estate price has given investors added reasons to invest in real estate.

The investors with a foresight of market have already started moving their funds to real estate.

Rental Income and/or regular monthly income in times of uncertainty is a reason for shift towards real estate.

Capital appreciation is the cherry on the cake.

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