Smart investors carefully evaluate projects, using their knowledge of finance to identify profitable opportunities.

The real estate sector has consistently outperformed other assets in value appreciation and exhibits greater resilience to short-term market fluctuations compared to stocks. It shines as a reliable strategy for wealth-building in the ever-evolving financial landscape. The latest data released by real estate consultant Colliers showed that institutional investments in real estate stood at US Dollar 822.3 million during October-December 2023, as against US Dollar 1,299.40 million in the year-ago period.

Kishan Govindaraju, Director, of Vaishnavi Group said, “The complete resurgence of the residential segment, following a period of decline, serves as a testament to the opportunities within the sector. The successful transaction of 82,612 housing units during the July-September quarter reflects a noteworthy 12 percent year-on-year increase, marking a significant milestone for the industry.”

He added that rental income from real estate properties generates a passive cash flow, helping investors cover mortgage payments and maintenance costs, and providing a consistent profit—especially valuable during economic uncertainties. “real estate offers versatility in investment strategies, catering to both those seeking long-term stability and those pursuing short-term gains. Options range from residential and commercial properties to real estate investment trusts (REITs), enabling investors to tailor their portfolios to specific financial goals and risk tolerance,” Govindaraju added.

Smart investors carefully evaluate projects, using their knowledge of finance to identify profitable opportunities. The shift towards these non-traditional real estate ventures reflects a strategic move, steering away from mutual funds, bonds, and conventional assets. “In cities like Bangalore, investors display profound market acumen, staying abreast of the latest trends. Their financial acumen goes beyond traditional stock portfolios because they actively look for ways to increase their wealth,” says Shesh Rao Paplikar, Founder & CEO, of BHIVE Workspace.

He suggests that over the next decade, alternative asset classes will command substantial investments, posing formidable competition to established financial instruments. “The investor landscape is evolving, driven by a pursuit of higher returns and a keen understanding of emerging market dynamics, reshaping the contours of wealth creation in the bustling cityscape,” Paplikar said.

Several factors including end-user demand, improved regulatory mechanisms (RERA and IBC), sector consolidation, enhanced oversight of real estate projects by banks/FIs/Funds, and evolving investor protection regulations by SEBI contribute to increased confidence and transparency. Sunil Pareek, Executive Director, Assetz Property Group said, “India’s high urbanization rates, coupled with a young workforce, aged under 28, comprising over 50% of the population, drive significant investment in the real estate sector. This demand is fuelling innovation in both sustainable development and investment products to suit all wallets.”

“With favorable unit economics, lower capital values, higher cap rates, and lower rentals compared to global cities, Indian real estate offers a distinctive investment opportunity with higher yields and returns on investment. The positive climate is expected to persist until entry prices align with key global markets and other preferred investment options,” Pareek said when asked about how long will this go on.