Why should you invest in real estate during this pandemic?

Amid coronavirus pandemic, real estate has once again emerged as the safest investment option. For Indians, owning a home has been traditionally considered a matter of prestige as well as safety. A preference for paying rents as against making long-term investment commitments in homes gained prominence.

A higher rate of interest on home loans and the argument that it is cheaper to rent than buy a house. However, the coronavirus pandemic that we are facing right now will change the mindset.

For starters, the ownership of the house brings with it an unmatched sense of security. The people will seek to own their personal house and that will be the silver lining going forward. The value of properties in the real estate market will, therefore, remain stable. To put it into perspective, the private market commercial real estate returned an average of 9.85 percent over the past five years, according to the National Council of Real Estate Investment Fiduciaries’ (NCREIF) July 2018 data.

Real estate is not paper money, this is the asset you can hold tangibly which further enhances its reliability and return on investment. The positive relationship between GDP growth and demand for real estate stems from the inflation hedging capability of the sector.

As economies expand, the demand for real estate drives rents higher and this, in turn, translates into higher capital values which make real estate a secure investment in that sense.

The post-pandemic world will be good for the real estate sector. Timing is crucial when one is considering investing in real estate. And the time now is ripe to put it through action. Financial security is foremost on people’s minds and one must deploy their money through multiple avenues. In the current situation, real estate offers you the best bet — stability, security and safety.

Source: An article from CNBC TV18 published on 6th May, 2020.

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