Beat inflation by investing in real estate
Inflation means : a general increase in prices and fall in the purchasing value of money. It is important to at least keep on level terms with inflation to maintain your purchasing power and standard of living so you are looking in the right direction.
You are right too in your observation that the products offered by the banks will not stand up to inflation. It must be clear that opting for a safe investment will not help if you want a real return. By safe investment, I mean one that guarantees paying back at least the amount of money originally invested.
Even though the real estate market In India is not at its best, experts say that the next two to three quarters will be stable and then it will witness gradual improvements. The Indian real estate market is said to be one of the best investment options due to a number of reasons.
i. Firstly, the real estate industry has withstood the impact of economic slowdown successfully. Looking at the commercial sector one can say that even though companies are in a wait-and-see mode and are progressing very slowly on executing the projects, they are still committed to their expansion plans. Same can be said of the retail sector. The retailers both national and international are looking for expansion by buying spaces in high streets and malls. Also, in the residential markets, the capital values in many micro markets across cities have already crossed their previous best of 2008.
ii. Secondly, India’s position in property markets is strong amongst its Asian counterparts. There are many under-construction projects in India and China is the only country that is ahead of India. Developers are taking steps to correct the situation as most of them have lower level of debts as compared to developers of other countries.
iii. Finally, looking at a larger picture, the sector is not on the verge of global meltdown as it will require some tragic events like global recession which in turn will impact the sector.
iv. Overall, it is expected that the first half of the year would be subdued and could gain momentum towards the end of the year, provided that there is economic recovery and political conditions remain stable.