Friday, 13 November 2015

Why is real estate investment logical in a sluggish market?

Investment in real estate can prove to be lucrative if buyers home in on a good location and find a reliable developer

The global share markets are quite volatile and despite India’s positive mid-to-long term economic outlook, it is waters. A lot of hard-won investor wealth has been eroded in the recent past. In these uncertain market conditions, it makes sense to regenerate one’s faith in real estate investments which can fortify end capital.
Though the real estate industry has been going through hard times for more than year now, the hardship is primarily from the seller’s point of view. For buyers, Indian real estate is more lucrative than it has ever been before.
Here’s why real estate can prove to be the best investment proposition today, provided that the buyer has chosen a good location and reliable developer, and has done a detailed due diligence of the deal:

The right time for lucrative deals:-
Developers are sitting on a huge amount of unsold inventory that is affecting unsold inventory that is affecting their cash flows and eroding profitability. Moreover, price growth has been more or less flat in major Indian cities for more than a year. To break out of this deadlock, players are offering handsome discount and buyers-friendly home loan deals that can actually make a lot of sense in today’s market condition. In short, this is a buyer’s market. Such Jaypee GreensWish town Noida Project developed by the jaypee group brings more effective proposal and offers for Buyers and investors.

A stable asset
Unlike the share market, which is speculative and highly volatile, the real estate market is quite stable. Even if the value of a property comes down, it is a gradual process and over a long period time. This presents a much more favorable scenario than the equity market, which change its position several times a day. In this sense, real estate investment remain rock solid, even in adverse market conditions with an extreme scenario of a nominal loss. The share market does not provide this security, and can in fact wipe out an entire life’s savings in a day.

Smart Cities
The government has recently announced the list of cities it wants to develop in to smart cities. Of course, it will take a few years to initiate the process and complete these undertakings. However, the real estate market operates on anticipatory sentiment, so the property markets in those cities will start showing more buoyancy almost immediately; this means that real estate investments there will yield better returns in the long run, no matter how the share market performs.

Rental Income Opportunity
Property purchased in the current scenario can be used to generate rental income while its potential selling price appreciates over time – or, in a worst case scenario, remains at status qua at the purchase price. As a lot of people are desisting from buying new properties in the hope that prices will come down, or simply because they can’t afford it, the demand for rental homes is rising steadily.

Tax Savings
With the government as well as the business lobby success-fully pursuing interest rate cuts, home loans are getting cheaper. Lower home loan interest outgo and the associated tax benefits on home loan EMIs generate extra saving.  


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