Is Real Estate Investment Safer Option Than Share Market in 2020-21?

• @kw
• 08 Jan 2021

COVID – 19 pandemic has shaken up the entire economy and the real estate sector was the worst hit among all the businesses. In the first few months of lock down, property sale has almost touched the bottom at zero level. No buyers were coming forward, through real estate companies were trying several virtual methods by using technology to sell their inventories but with little success. On the other end the Share market had a major impact and the market crashed like a pack of cards causing huge losses to investors. As Real Estate deals are in tangible assets, investors have started evaluating it as safer long term investment than the uncertain nature of stock market. Investors are now skeptical about blocking their money in stock market due to its volatile nature. Investors feel  more secure with Real Estate properties as it gives  the sense of owing  a tangible asset  where the speculations are on the basis of logical evaluations and not erratic  like the  share market price fluctuations. And further investment in housing or a commercial property can yield rental income in addition to gains from Capital appreciation.

Government of India has also been emphasizing on sustainable projects. The benefits that developers are offering are adding up to make the investment in real estate properties more attractive. The real estate investment has become more affordable. Bank interest rates on housing loan has been reduced and stamp duty charges has been revised. Investors are now finding Real Estate Investment more attractive compared to investment in shares, mutual funds and term deposit with banks and Financial Institutions.

The demand for housing in post pandemic period is also showing an upward trend from the end users. This is primarily because of changing trend in working culture in corporate sector. Work from home is becoming a sustainable feature in some of the Industry sectors. A trend of reverse migration is evolving and large number of employees especially from the IT sector is moving to smaller towns and cities to be near to their parental home. This is giving boost to the requirement of housing in Tier II and Tier III cities and therefore making investment more attractive in smaller cities.

Government effort to make more affordable housing project available and its ambitious project of making one hundred smart cities several steps are being taken to make the investment in real estate sector more attractive and proper  measures and guards are being taken to investment in this sector safe. It is estimated that Real Estate Market which has been showing an upward trend for last Two decade will continue the trend in years to come, though there may be some changes that can be observed in market dynamics.

Shri. Pankaj Kumar Jain, Managing Director of KW Group Pvt. Ltd. in one of his recent articles takes a positive view and says big yes to investment in the real estate sector in the next two years and everyone is optimistic about the future of the real estate industry in the country and look forward to brighter days. His advices, ‘if you are planning to add real estate in your investment portfolio, this is the right time to start visualizing and plan it for a better future. It’s the right time to nurture you liquid cash into the most potential investment via brands that are here to redefine the real estate and make it the most promising investment option in the near future.’