Real Estate and It’s Demand in the Market.
Real estate is considered an asset made up of the land and the property that stands on it. This business sector has grown at a fast pace over the last few years. However, the market of this sector is subjected to the ‘supply and demand’ principle just like other goods and assets.
The prices of housing projects go up when the demand is high and the supply is poor. And, the prices of the properties tend to be lowered when there are lots of options available in the market of a particular area, and the demand goes down.
Why Investing Is Important: Investing ensures your current and future long-term financial security. There are various ways to invest, such as stocks, bonds, liquid funds, etc. Some people tend to invest in intangible assets such as gold, machinery, and real estate. Tangible assets add value to a company’s net worth as it can be maintained with good documentation. Another advantage of tangible assets is, they can be used as ‘collateral’ for loans. This can help the companies in easing their finances and continue operations. Tangible assets tend to have higher inflation values compared to other forms of investments, which ensures higher returns.
Considering the lockdown and the social distancing scenario due to the coronavirus pandemic, the market has been negatively impacted. Incomes of people have been impacted. Those who are self-employed suffer the most. With most of the population staying home and the lowered rates of investments, the markets fear huge losses. The net GDP growth is estimated to be less than 2% for FY2020. Such instability infers that this is the right time to invest in passive income.
There are various investment options available such as SIPs, mutual funds, shares. But, real estate investment would be the best option to go for. This sector has been reliable considering the conditions put forward by the bank, share market crash, and a few other options that seem to be safe in the beginning. This is the best time for investors to invest in the real estate market. With the growing population of India and the increasing shift of the population to the cities, the upcoming years will see a huge demand for real estate assets. Though the demand would vary in different cities, investing in real estate especially in a city like Bangalore would be a good option. This is advisable if you are looking for a long term investment.
For instance, you buy a property for a lesser price, amid a public health crisis. After a few years, when things go back to normal, the demand and the price would rise again. At that point in time, you would get higher returns against your investment.
The deficit demand faced by the industry has lead to various offers generated by the builders. Considering the situation, properties are being sold at comparatively lower prices, along with other profitable EMI plans. The reduced Repo Rate declared by the RBI, will result in lower interest rates offered by the banks. The best time to apply for a loan as well. The yield of real estate is higher compared to any other rental assets, which makes it another safer option to invest in. The real estate investment is simple to understand, hence can be utilized by anybody. Though the poor liquidity might be the concern for a few people, it has returned over 9.8% average in the past 5 years, which makes it highly competitive against the other investment options.
The pandemic and the lockdown are the reasons for the declined economy throughout the nation. But, these should not stop you from investing. There are chances that the financial conditions will remain unstable for the next 3-5 years, but things will fall in place soon.
It is advisable to focus on long term investment instead of short term ones. Plan your investment considering the long term stability and returns. Investing in assets like real estate and gold would be a smart choice.
It would be appropriate to do your research depending on the budget, area, and type of property you might be interested in. Discuss with your financial advisor about the types of assets you can invest in considering the lockdown and the financial crisis.
Investing in assets that have profitable returns is always better than keeping cash with you. Let your money make some money.
