While there seems to be a crisis of credibility in the real estate sector on part of the investors, a survey by the Associated Chambers of Commerce and Industry of India (Assocham) says otherwise. It says the traditional investment options like gold, government bonds and bank fixed deposits are considered old school. Investing in realty, mutual funds and life insurance are preferred by the younger generation and are considered to be an “efficient and effective” investment option.
Nearly two thirds of urban, employed Indians feel that real estate offers the best investment opportunity. Interestingly most working Indians in cities feel that real estate offers the best long term returns. In its survey titled ‘Current investment patterns in working urban Indians’, Assocham polled a cross section of urban workers ranging from directors and executives to teachers, professionals in PSUs and MNCs and self-employed traders, lawyers, doctors and financial experts.
The overwhelming preference for real estate also helps divert investible funds away from other investment options involving more risk like the stock markets, mutual funds and gold, among others, the country-wide survey conducted by Assocham said. In the survey covering 10 major cities, including metros and mini-metros, the majority of respondents picked investing in realty as the first and most preferred option. Respondents felt that the Indian real estate sector has huge prospects in sectors like commercial, hospitality, retail, manufacturing and healthcare. Housing is, not surprisingly, on top of their agenda.
Releasing the findings, Assocham secretary general D.S. Rawat said: “Hefty escalation in price with growth & development in the area is another significant factor that attracts working individuals and propels them to invest in property.”
Of those interested in investing in real estate, about 40 per cent prefer to invest in properties in Tier-II and -III cities and state capitals, as prices in Tier- I cities are beyond their means. About 25 per cent of the respondents preferred investing in Tier-I metros like Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore.
