Real Estate Investments To Gain More Favour Versus Stocks

By : 360 Realtors

02 April, 2020

In India, Real Estate has been a popular tool to invest in. The popularity of Real Estate is rooted in numerous factors such as higher appreciation in property prices, concurrent income in the form of rental returns, & Real Estate’s reputation to offer sufficient hedge against inflation. Realty prices witnessed a steep rise during 2008-2014, giving great returns to the buyers. However, as realty prices started losing steam, the interest of the investors also softened. Investors started moving to other options such as equity markets, mutual funds, SIPs, etc.

However, the agnosticism about Real Estate might change. Indian equity markets have tumbled after the COVID-19 induced panic has brought the entire nation to a grinding halt. As the world economy has also been rattled, FDI outflows continue from India, resulting in a steep decline in stock prices for most of the leading companies.

As the stock market has tanked, it is natural that investors will look for other options. The outbreak of COVID-19 alongside a host of other geopolitical tensions has once again suggested the limitation of paper money. The recent crisis has once again shown that mutual funds are indeed subject to market risk.

As the financial markets are in a tailspin, it is natural that many investors will once again look out for hard assets like Real Estate. Property prices in major Indian cities have corrected which will further incentivize investor interest. Although residential Real Estate is stable in recent years, commercial property is showing commendable appreciation. Investing in the right office or retail asset can render high ROIs in the form of capital appreciation.

Real Estate is also believed to be a suitable tool to hedge against inflation. Other factors that will accelerate investor interest in Real Estate will be decline in repo rate cut & recurring income in the form of rental yields.