Pan-India survey shows real estate still the best asset class for investment


Track2Realty conducts a pan-India survey to understand and compare urban India’s investment choices and preferences

Some key findings that indicate the correlation between the aspiration quotient and the current status of the Indian real estate sector:

  • 88% Indians find real estate to be the best asset class to invest in.
  • 72% believe pre-launch or early stage of construction is the best bargain.
  • 78% maintain upcoming locations offer better returns than prime localities.
  • 84% home buyers are sulking and repent their home buying decision.
  • 46% home buyers have serious issues with the developer to reconcile.

These contradictory findings don’t suggest that this pan-India survey by Track2Realty has completely gone directionless. As a matter of fact, the first ever such exhaustive study on the home buyers’ and seasoned investors’ psycho graph suggest that the ‘greed is good’ prevails in the entire ecosystem of the business. Also, it’s evident that both, the developers and the home buyers are on the same page when it comes to the temptation to make money with property as a trading commodity.

Majority of Indians are motivated by a single factor when it comes to investing, and that is Return on Investment (ROI). “I can live on rent and invest in other instruments if the ROI is higher there,” admits Raju Kamat, a home buyer in Mumbai. “The reason why I have invested in a house, is that no other investment can give me as high returns as real estate. This has been a tried and tested investment, with highest returns in the last three decades.”

Needless to say, this also suggests that real estate is and will continue to remain the best asset class to invest, even though the aspiration for the house is contradictory to the user experience.

User experience dips

The performance of the sector from user experience, has further gone down, compared to our 2011 survey when nearly 80% of the people were dissatisfied with their home purchase, as against 84% this year. Only 7% Indians find stocks and mutual funds to be their primary investment choice, while a mere 5% find gold as their first choice.

Had this finding not come with some riders, the news could have definitely sent a positive signal to the Indian developers who are reeling under slow sales and a liquidity crunch. What makes the case of real estate even more interesting, is the fact that the Indians don’t find real estate investment to be the riskiest one; they feel the stock market is more risk prone. 65% find stocks to be the riskiest and only 28% find real estate most risky; while the remaining 7% find other investment instruments to be the riskiest.  

“Despite the slowdown of the real estate market, this is one investment option which will always be less risky due to demand being much higher than supply,” believes Vinu Dawn, a home buyer from Coimbatore. “Property prices may correct or crash in the short-term future, but it will never collapse like the stock market. More importantly, real estate is a real asset from the standpoint of physical possession of an immovable investment.”  

20 city survey

Track2Realty’s pan-India survey to assess the investment aspiration and concerns of urban India has been conducted in 20 cities – Bengaluru, Chennai, Hyderabad, Coimbatore, Kochi, Mumbai, Nagpur, Nasik, Pune, Ahmedabad, Jaipur, Bhopal, Delhi, Noida, Ghaziabad, Gurgaon, Chandigarh, Kolkata, Lucknow and Patna – between September 10-25, 2015.

A structured set of questions, based on investment choices, horizon, return expectations, aspirations, real estate exposure, experience with the sector and satisfaction level, was given to the respondents, of which most were home buyers.

The survey was also conducted to understand the quest for real estate, along with a comparitive analysis vis-a-vis other investment choices, overall value proposition, returns and future investment plans.

(The author is CEO, Track2Realty)

 

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