Real Estate Emerging Top Choice for Investors Across The Board

The trials and tribulations of the pandemic are long gone with real estate emerging as the top investment class for investors. Going by CII-ANAROCK Consumer Sentiment Survey – H1 2022, investors buoyed by GDP gains and sustained job growth are embracing real estate as a top investment avenue for long-term gains. 

The survey exhibits a tectonic shift in asset class preferences with gold and fixed deposits turning out to be the least-preferred investment options as a lowly 7% and 6% of respondents voted them as their primary choice of investment.

The same sentiment is reflected strongly across homebuyers with those who consider real estate as the top investment avenue up by 5% percent from the previous year. The current survey shows real estate trumping the stock market as the best investment option with 59% of respondents voting for it against 28% for the stock market.

Strikingly, millennials, a group conventionally inclined to leverage capital gains as a form of savings, are moving away from that mindset in favour of buying a home. In fact, as many as 56%, against the 53% last year, are now in favour of using capital gains to invest in homes at a later stage.

Even Gen Z, the demographic commonly associated with a life lived on the edge, is demonstrating an increasing bent towards real estate. As much as at least 20% of Gen Z respondents in H1 2022 are those who are ready to shift their capital gains into real estate. 

The home buying sentiment is consistent with end-users who dominate the residential growth demand. 69% of the survey participants who voted for home investment claim it for themselves, lending credence to the post-Covid reality of home ownership becoming a top priority for security & investment.

The noticeable shift in buyers’ preferences post-Covid-19 is evidently palpable as the share of participants favouring investment in property for the long-term goes up by 2%. Now, at least 31% want to purchase a property from an investment perspective.

That leads to another intriguing investment viewpoint where ready homes, though still in hot demand, are getting caught up by new launches. From 46:18 (H1 2020) to 30:25 (H1 2022), the ratio of ready-to-new homes/ launches is narrowing down progressively.

The underlying cause driving this, other than renewed real estate buying sentiment, is increasing buyer confidence in listed developers entering the fray. That such developers by and large are reporting increased housing sales bears a strong testimony that a new kind of microeconomics is brewing, driven strongly by the new-age end-user pushing for his claim of the real estate pie.