Recent studies show Real estate gives better returns than equity or gold
- The investor today can chose among multiple investment opportunities, which makes it difficult to answer which is a better investment vehicle – real estate, equity market or gold.
- According to recent studies it has been seen that amongst various asset classes, including equities (Sensex), commodities (gold), bank fixed deposits (1-3 yr maturities), government securities (10 yr maturity) and real estate, the real estate segment has performed with the highest returns over the last 20 years (1991-2013 period).
- The figures below represent the trends in the pricing for Gold and Silver and Real Estate Index in India and specifically in Delhi and NCR Region.
- It is clearly visible that the Residential Index for the Delhi NCR region has reached 199 as compared to 179 for the country in March 2014 from the base index of 100 from 2007. This shows that the Delhi/ NCR region has a higher scope in real estate development than many other parts of the country.
- It could be concluded that real estate investment is one of the strongest investment classes, especially for people in it in the long run. Real estate investments might have witnessed a slowdown in the recent past but it is slated to grow in the near future since better sentiments are visible in the international markets.
Fig: Trend in Gold Prices per gram in India over the last five years
Fig: Trend in Silver Prices per kg in India over the last five years
Fig: Trend in BSE Sensex over the last five years
Fig: Residential Index for Delhi/NCR and India from 2012 to 2014