Nationwide survey reveals investors still bet on real estate

[] Despite slow sales and a slump in the real estate market, a Track2Realty pan-India survey reveals that majority of Indians still believe in the business potential of investing in the sector

The Supreme Court of India might feel developers’ pre-launches should be banned, yet, several Indians find it a viable option to earn a quick buck. With a mindset of high risk and high gains, close to one-fourth of the home buyers today, are investors and feel pre-launches are the best time to make sizeable returns.

You are reading: Nationwide survey reveals investors still bet on real estate

In a pan-India survey, as many as 72% feel this is the best bet; something that suggests why pre-launches are so successful despite the many incidents where the investors have lost their money. 18% investors want ready-to-move-in houses despite their high cost, to be safe than sorry; while 10% buyers prefer under-construction properties as surity of delivery.

“Which asset class is completely risk-proof anyway,” questions Komal Varma, a home buyer in Gurgaon. “I think, by and large, real estate is less risky. Even in pre-launches, the kind of returns that the property promises, is something that nullifies the risk factor. It makes for great business sense.”

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

Upcoming locations rule the roost

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Nearly eight out of ten, a whopping 78% home buyers feel the upcoming locations are the best places to invest in, since the prime locations are at a saturation point and cannot give the kind of returns an upcoming location can. 18% Indians would bet on established locations for the fear of getting trapped, if the infrastructure projects in these upcoming locations, only remain on paper. 4% investors are not sure about it.

“It is all a question of a few years before or after,” points out Praveen Tyagi, a home buyer from Noida Extension. “The proposed infrastructure projects have to come up in the upcoming locations once the area gets populated and habitation demands it.”

Despite a stagnant real estate market in the last few years, more than six out of ten respondents, as many as 62%, feel it has been under-bought in India due to affordability. Only 28% think it has been over-bought and the remaining 10% maintain that it depends on the family structure.

The choice of investors is nevertheless taking a shift. Though an apartment is still one of the best bets for the investors, with 48% aggressively confiident, office space as a serious choice of investment, is emerging to the extent that 34% Indians would like to invest in office spaces. The remaining 18% maintain that it depends on a number of factors and is a market-to-market reality.

Top 10 cities

Top 10 cities where the Indians would like to invest in office space today is – Ahmedabad, Chennai, Hyderabad, Mumbai, Bengaluru, Gurgaon, Pune, Coimbatore, Kolkata and Noida. In terms of housing investment, top ten cities are Bengaluru, Chennai, Hyderabad, Pune, Coimbatore, Mumbai, Gurgaon, Kolkata, Nagpur and Ahmedabad.  

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Which are the cities that are home towns of investors across the geographical boundaries to fuel the real estate business?

The study noted that despite the slow sales in India’s financial capital, Mumbai still tops the list of having investors pumping money into every city. This is surpringly followed by Patna and then, Ahmedabad, Gurgaon and Bengaluru.  

Do the investors fear any price correction or a crash? Nearly all, a whopping 94%, feel that home prices will never come down. The remaining 6% maintain that even though there is a correction in the short term, it will gain in the medium to long-term.

Why won’t real estate prices reduce despite slow sales?

54% feel the forces of  politicians, bureaucrats and black money operators, is so strong that they will not let the prices fall. 30% feel most of the developers have strong holding capacity in the event of slow sales. The rest 16% believe it is due to the supply and demand gap.

(The writer is CEO, Track2Realty)

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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