Why experts consider residential real estate the safest investment in India

Indian residential real estate continues to be a perennial favourite among investors, this comes amid evolving investment opportunities. It is fuelled by a combination of factors.

The most compelling reason to invest in residential real estate is the consistent appreciation of property values over time. Historical data shows real estate values in India have been steadily increasing due to urbanisation, population growth and rising income levels. Cities such as Mumbai, Bangalore and Delhi have witnessed significant increase in property prices, offering huge returns to long-term investors.

Experts believe Indian residential real estate is expected to continue its upward trajectory and profitable investment opportunity.

Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO- Maharashtra, said, "The Indian residential real estate sector has shown remarkable resilience, even during economic downturns, offering stability and reliable returns compared to more volatile asset classes. The ongoing urbanisation, increasing middle-class income, and strong economic fundamentals drive demand and growth in the real estate market. Additionally, real estate investments offer significant tax benefits and diversification potential, making them attractive to both domestic and NRI investors."

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"Furthermore, regulatory measures such as the Real Estate (Regulation and Development) Act of 2016 have increased openness and accountability in the industry, increasing investor trust. With a growing middle-class population and increasing preferences for superior living spaces, residential real estate offers attractive returns and long-term asset preservation options in India's dynamic landscape. The market is expected to continue its upward trajectory, providing a secure and profitable investment opportunity," she added.

Echoing similar sentiments, Ayushi Ashar, Director at Ashar Group & Member of the Managing Committee of MCHI-CREDAI, said the Indian residential real estate market is experiencing unprecedented growth, with a valuation of Rs 3.47 trillion and a remarkable 36 per cent increase in volumes and 48 per cent increase in value in FY23.

"This surge is driven by a combination of factors, including escalating demand for homes, rising property values, and a growing interest in premium properties in major cities. High-net-worth individuals are investing substantially in luxury homes, drawn by the promise of stable returns and tangible assets. Real estate investments offer a unique blend of stability, steady income, and tax benefits, making them an attractive option for long-term investors," Ashar said.

She explained that the implementation of RERA has significantly enhanced the safety and transparency of real estate investments in India, promoting accountability and quality assurance.

"This has led to increased trust and confidence in the sector, making it a more secure investment option. As the middle class continues to grow and urbanisation accelerates, the demand for housing is expected to rise, driving economic growth and contributing significantly to India's GDP. With its promise of shelter, security, and stability, real estate is fulfilling the aspirations of a growing population, cementing its position as a lucrative and in-demand investment opportunity," she said.

Ashok Chhajer, Chairman and Managing Director of Arihant Superstructures Limited, said, "The Indian residential real estate market stands out as a pillar of security, attracting those seeking stability and growth. By promoting long-term investment, real estate holds the promise of substantial returns over time, firmly establishing itself as a preferred investment choice in India. This sector's steady growth is fuelled by rapid urbanisation, strong governmental support, and tax benefits."

"In particular, investing in Navi Mumbai is highly favourable due to its promise of better returns. The land allotments by the government ensure clear titles, providing home buyers with a safe and secure investment. Additionally, the ease of resale adds to the attractiveness of this market. With the booming markets, the new airport, and the Atal Setu sea link development, Navi Mumbai is setting new benchmarks for a prosperous future. These infrastructural advancements are transforming the region into a hub of opportunity, making real estate investment here not only safe but also exceptionally lucrative," he added.

Pavan Kumar, Founder and CEO of White Lotus Group, said that key cities like Mumbai, Delhi, and Bangalore have witnessed property prices increasing at an average annual rate of 8-10 per cent. "While the financial world offers a variety of options, Indian residential real estate stands out for its stability and emotional connection. Over the past decade and a half, residential real estate in India has demonstrated consistent and robust appreciation. Key cities like Mumbai, Delhi, and Bangalore have witnessed property prices increasing at an average annual rate of 8-10 per cent. This steady climb trumps the volatility of the stock market, offering a reliable path to wealth creation," he said.

He said that a home is more than just an investment, it's the foundation of a life. "Owning your space brings a sense of security and belonging that's unmatched. It's a place to raise a family, create memories, and feel truly rooted. This emotional security is invaluable. Real estate is an asset that transcends generations. Traditionally, families in India pass on properties, land, and gold to the next generation rather than stocks or mutual funds. This cultural inclination towards real estate is rooted in the long-term value and stability that these assets provide. A house is not just an investment for the present but a legacy for the future, ensuring that the next generation has a solid foundation to build upon," Kumar added.

He further emphasised that residential real estate in India offers a unique combination of financial stability, emotional security, and generational wealth transfer. "The consistent appreciation of property values, coupled with the inherent emotional and cultural significance, makes it one of the safest and most rewarding investment options available today," he added.

Indian residential real estate emerges as a safe and attractive investment option due to its potential for appreciation, tangible nature, rental income generation, inflation-hedging capabilities, favourable government policies, and the ability to diversify risk. With the increasing demand for housing driven by urbanisation and a growing middle class, residential real estate offers both financial and emotional rewards, making it a compelling choice for investors seeking stability and long-term growth.