Can realty investments pay off profitably?


The realty sector has four subdivisions, namely housing, commercial, hospitality and retail. It generates the second-highest employment in the country after the agrarian segment. Returns are closely tied to risks in the realty space although there are available options where wise investments may generate superior returns as compared to conventional investment avenues. Realty investments have also long been perceived as cushions against inflation.

The ultimate target for an investor is maximization of returns while opting for mitigating risks simultaneously. The first step is to work out the best possible investment as per one’s needs and profile. The realty sector is a promising avenue which is the safest bet for parking surplus funds.

A real estate investment helps in building an asset and also securing the future through wealth multiplication. ICRA has stated that the realty sector will continue witnessing steady growth and expansion, touching $1 trillion by the year 2030. The Principal Partner at Square Yards, India’s biggest integrated real estate platform, Deepak Khandelwal, stated that the incentives given to buyers and the economic boom contribute towards making property purchases more profitable investments. He added that on account of its lower risk and high return nature, the realty sector has successfully weathered all storms to keep instilling more confidence amongst investors with regard to striking future jackpots instead of getting into the cocktail of uncertainty that is a part of other tools for investments. He also felt that wealth erosion is lower in real estate over a period of time on account of its tangible nature. Irrespective of market trends/forces, it may be readily transferred to the upcoming generations, enabling a secure and positive future for the property in question. Owning real estate may also help in unlocking opportunities to earn regular and stable income via rentals. This will only keep growing over a period of time in addition to the property’s capital values according to Deepak Khandelwal.

Investors are also attracted by the lower rates of interest, cuts in stamp duties, comparative property price stability and tempting pre-payment plans in the sector. CRIF High Mark, a credit bureau approved by the RBI, recently released data indicating a clear rebound in the retail home loan category in spite of a few weaknesses arising from the coronavirus pandemic. It also stated that real estate will keep growing with remote working becoming a bigger reality and higher demand for spacious properties which may double up as living and work spaces while offering resort-esque experiences at the same time for customers. A recent United Nations study revealed that 60 crore of India’s population will stay in urban zones by the year 2030, indicating massive real estate demand in the near future. Experts attribute the high sales figures in recent times to record-low rates of interest, developer offers and incentives, reduction in stamp duty and higher interest amongst homebuyers for more comfortable and larger housing units. Another positive aspect towards owning property is that it will generate profits via reselling or rental income and it brings more happiness and emotional fulfillment to buyers.

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Published Date: Sep 14, 2021