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.
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