Wealth Guide: Real estate in sharp recovery – Should we invest or wait? The expert suggests this


Wealth Guide: Real Estate – After the continued fallout from muted demand and the covid-triggered crisis, real estate in India is finally showing signs of a strong recovery. According to research published by Anarock, in Q1 22, total residential sales in India’s top 7 cities stood at ~99,500 units, a massive jump from the same period last year when sales totaled just over 58,000 units. In Q1 22, the total number of new launches stands at more than 89,000 units, a jump from the same period last year, when it was just over 62,000 units.

The figures further reveal that real estate is on solid footing and is set for an extended period of strong recovery and growth. In 2021, average house prices rose slightly, at the rate of 2.5%, according to a Reuters survey. However, real estate prices are expected to increase by around 6-8% on average in 2022. The bullish price cycle is expected to continue until 2024. Amidst all these real estate developments, Shubham Arora, Director of Sheerbulls India Pvt Ltd., shares its knowledge. if you have to invest in real estate or wait longer:-

Now is a good time to invest in real estate

“As real estate has returned to the mainstream after being on the sidelines for a while, now is a good time to invest. Especially for investors looking for a risk-free asset to park their money in. Prices are still low and there is ample room for capital appreciation. Over the next 2-3 years, one can easily realize a capital gain of around 16-22%,” says Shubham Arora.

“Similarly, real estate also has additional advantages in terms of recurring rental income and benefits available on tax returns. Average residential rental yields are moderate and mostly between 2 and 4%. However, it are specific asset classes such as student accommodation, rental houses and co-living spaces that can generate higher rental returns.During covid times to arrest the decline in sales, major developers in India have come up with schemes of relaxed and attractive payments such as cash rebates, exemption programs (GST/Stamp Duty), free parking spaces, insured rentals, etc. Many such projects are still in the market, but could be rolled back when the market reaches normalization, so it will be a smart move to use them now rather than wait,” Arora added.

Volatility of other types of assets

“With the exception of the stock market, most other popular alternative assets are in free fall. The Bloomberg Global Aggregate Index fell 11% on March 22 from its January 21 high, indicating one of the most big losses in bond market history Gold markets are still volatile FD rates remain mostly unattractive Amidst these changes, real estate continues to be a viable option for investors. It is an evergreen asset and is one of the reasons why more than 80% of household income in India is parked in it. In contrast, only ~5% is directed to the stock market,” said he suggested.

“It’s a durable asset and can be a good hedging strategy against rising inflation. worsen amid Russian-Ukrainian tension which may lead to a further rise in oil prices. In the midst of a price hike, developers will have no choice but to pass it on to homebuyers,” he concluded.

(Disclaimer: Opinions/suggestions/advice expressed here in this article are investment experts only. Zee Business suggests its readers consult their investment advisors before making any financial decisions.)


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