Why Real Estate is NOT a profitable investment in India in 2018 and 2019

Real Estate isn’t a profitable investment anymore as 2018 has witnessed the death of real estate investment in India, and 2019 is not looking promising either. The age old saying of ‘high return on investment is guaranteed’ in real estate investment, isn’t true anymore. 

With just about 7.50% and 5.75% increase in property prices annually during 2013 and 2017 in Mumbai and Bangaluru respectively, can’t be considered as the best return on investment (National Housing Bank data). The banks offered average 7% interest on Fixed Deposits during the same period.

To maintain the real estate, the investors needs to shell out additional money. The maintenance includes tax, society charges, property maintenance  etc.  “Considering the rising interest rates and high maintenance cost and tax on rentals and capital gains, I would not suggest investment in physical real estate,” said Nishant Agarwal, managing partner and head, family office, ASK Wealth Advisors.

Instead of investing in real estate, Indian investors chose to put money in mutual funds (SIP instead of EMI) as they don’t have trust in builders due to volatile market.

2018-19 will continue to be a cautious year, where developers will look to consolidate and exhaust existing inventory before launching new projects while buyers and investors will continue to wait to see if there is further price correction or consolidation in the market.” Sarjan Shah, managing director, Group Satellite, a Mumbai based real estate developer quoted.

So, wait for a while and check out better options to invest. Following the comparative data where real estate was considered as 3rd or 4th option to invest. The Economic Times considered as 9th options, so was not included.

  Economics Times Financial Express Bank Bazzar.com Forbes (Global)
1 Stock Market:  Mutual Funds PPF: public Provident Fund The Stock Market
2 Equity & Debt Mutual Funds Stock Market:  Mutual Funds Peer-to-Peer Lending
3 NPS: National Pension System Real Estate: Stock Market:  Real Estate
4 PPF: public Provident Fund NPS: National Pension System Real Estate: Invest in You
5 Bank fixed deposit (FD) PPF: public Provident Fund Gold ETF  







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