Nevertheless, a closer inspection of all of them reveals that investing in real estate in India has the least risk and the highest returns. There are innumerable opportunities to expand your wealth, ranging from real estate for beginners to real estate for entrepreneurs.
Is Real Estate Investment Good In India?
A real estate investment can be a much smarter choice than stock market investments, gold, cryptocurrencies, or even financial institutions. Stock prices are constantly oscillating. Gold prices may help mitigate market volatility, but gold also has storage and theft concerns. We know little to nothing about cryptocurrency because it is a new player.
The real estate sector has grown significantly in recent years as a direct consequence of the Real Estate (Regulation and Development) Act (RERA) and lower home loan interest rates, among other influences.
Real estate has always been considered a good long-term investment by investors. This is due to the fact that real estate prices tend to rise in the long run. It is also higher than inflation, so you are actually making money.
Bank savings accounts, on the other hand, offer comparatively low interest rates, especially when compared to inflation. And, as a result of the higher Return On Investment (ROI), the Indian real estate market has been buzzing with investors eager to invest.
After all, the ultimate goal for any investor is to maximize returns while also minimizing risk. The first step an investor takes is to identify the best investment for there profile and needs. The real estate industry is a promising one that is regarded as the most secure option for parking money. It not only promises to create an asset, but it also secures the future by multiplying wealth. When an investor purchases a property, he or she receives certain distinct benefits.
In India, the real estate industry is also second only to agriculture in terms of job creation.
Is Real Estate The Fastest Growing Sector?
According to the rating agency ICRA, real estate development will continue to expand over time. By 2030, the market is expected to be worth $1 trillion.
According to a recent United Nations study, by 2050, two out of every three people will be living in urban areas. As a result, the demand for housing and other related developments will continue. Following the implementation of RERA in 2016, the real estate sector has become more transparent, which has increased investor confidence. RERA was a game changer for real estate, bringing much-needed transparency to the industry.
The easy availability of information on project approvals and customer-centric court rulings has given the market and buyers even more confidence. According to the Indian Brand Equity Foundation, a knowledge center for Indian real estate investors:
From Rs. 12,000 crores (USD 1.72 billion) in 2019, the real estate market has grown to Rs. 65,000 crores (USD 9.30 billion). In 2019, housing sales in seven major cities totaled 2.61 lakh units. In 2019, real estate investment totaled Rs. 43,780 crores (USD 6.26 billion).
Although real estate prices fell in 2020, the sector is expected to recover and grow in 2022 and beyond. Affordable housing is expected to grow. Large, secure homes are supposed to be preferred by buyers. Tier 2 and 3 cities are also expected to grow rapidly. Ready-made housing is being anticipated to be the major driver of growth.
New development hubs are emerging in cities such as Indore, Chandigarh, Dehradun, Vizag, Jaipur, and Surat, according to Elysium Capital Research. These cities are generating numerous opportunities.
Furthermore, following Covid, the hybrid mode of work has resulted in a migration of skilled labour to satellite cities, which has increased demand in these cities.
New industrial and transportation corridors, cheap labour, easier supply chain and logistics management, and lower costs of living and doing business make these cities more appealing in the long run.
What Is The Growth Potential And Is It Really A Help In Tax Savings?
Because of it's tangible nature, real estate suffers less wealth erosion over time, regardless of market forces at play, and can be passed down to succeeding generations, providing your descendants with a bright and secure future.
Real estate investment in India can open up opportunities for a consistent and reliable monthly rental income that will increase over time, along with the capital value of the property.
Another advantage of owning a home is that it provides an intrinsic level of emotional fulfilment and happiness.
Even a small apartment or commercial property will yield a handsome profit, either through rental income or reselling after a certain period with a good profit margin.
Understanding tax exemption on home loan
This is great news for people looking to invest in the rapidly expanding Indian real estate market.
For the first home, both repayment of principal amount and payment of interest are tax deductible.
Repayment of principal amount entitles you to a deduction of up to Rs 1,50,000 under Section 80C; and this benefit is available to you regardless of whether you live in the same property, Self-Occupied Property - SOP or have rented it out, Let Out Property - LOP.
Real Estate Investment In India – Concluding Thoughts
Real estate is an asset class with long-term value, evergreen utility, and future security even in uncertain times. This, combined with the ease of financing, has made it a dependable investment for all, providing consistent and solid returns.
Experts believe that the low interest rate will remain in place for a few years. As a result, home buyers can apply for larger loans, expanding there options to purchase larger homes with improved amenities and a better lifestyle.
The Indian government is taking a number of bold steps to encourage development in the real estate sector. For example, the Smart City Project, which includes the construction of 100 smart cities, represents a significant opportunity for Indian real estate developers.
The government is focusing on reviving economic demand, and real estate is a key theme of it's infrastructure push. The center's goal is to create a welcoming environment for home buyers. When viewed from a broad perspective, the industry's future appears to be bright. On the plus side, real estate sales are expected to peak in the next couple of years.