Gold vs Real Estate: Where To Invest In This Festive Season? – Dhanteras, the first day of the festive period of Diwali, is considered an auspicious occasion not only to buy gold but also real estate which continues to be the most preferred asset class for investment for over 59% investors.
A new survey by FICCI-Anarock shows that real estate as the best asset class option has seen a 2% jump compared to the previous survey. Over 59% respondents now consider real estate as the best investment option, followed by the stock market which is favoured by 31% in the current situation.
Gold vs Real Estate: Where To Invest In This Festive Season?
The Homebuyer Sentiment Survey points out that in contrast, preference for gold witnessed a meagre decline, although ranking at the bottom of respondents’ investment options despite the surging gold rates. Currently, only 5% respondents view gold as their preferred choice for investment, it said.
Notably, sentiments towards the stock market have experienced a positive boost in the wake of Sensex and Nifty touching their new peak in 2024. Over the past two years, the stock market as an asset class has witnessed a noteworthy surge in preference among respondents, with 30% of them now favouring the stock market, it said.
The survey noted that 66% millennials and 41% Generation X respondents intend utilising their investment gains for purchasing real estate in the future.
Festive season fuels real estate demand:
Among Generation Z, 29% wish to make use of their investment gains for buying a house, as many as 28% allocate their investment returns for achieving travel goals, 39% for starting a business, 3% for retirement savings and 1% to be set aside for an emergency fund.
As many as 66% of millennials set aside their investment gains to purchase proportion, 2% for vacation, 22% for business, 8% for retirement and 2% for an emergency fund.
Among Generation X, 41% make use of their investments towards real estate, 2% for vacation, 11% for business needs, 21% for retirement and 25% for an emergency fund.
Why To Invest In Gold?
While both gold and real estate are popular investment options during the festive season, real estate offers a more solid opportunity for long-term growth. Property prices, especially in key metros like Mumbai, have shown consistent appreciation, and the festive season often brings attractive offers and discounts from developers. Real estate also offers rental income potential, providing a steady cash flow in addition to capital appreciation. Though many believe that gold is a safe option, its returns are limited to market fluctuations. For those looking to build wealth and secure tangible assets, real estate is the more promising option this festive season, as per Saurabh Phull, COO, The Guardians Real Estate Advisory.
Why To Invest In Real Estate?
According to Anurag Goel, Director, Goel Ganga Developments, in 2024, investment growth in affordable housing in the periphery of tier 2 cities emerges as the strongest real estate trend. Cities like Pune, Coimbatore, Indore and Jaipur are witnessing such segments realizing an annual appreciation of 15-18%. Real estate in the segment of Rs 30 to 45 lakh has the highest demand as the home loan rates are now stable and the government schemes are beneficial for first-time homebuyers. In these areas, infrastructure improvements, particularly in connective infrastructure, are increasing both end-user and investor demand.
In these markets, the ROI potential consistently outperforms that of metropolitan areas. The festive season, particularly in IT corridors and upcoming business districts, has been a hotbed for investment in real estate. Office spaces across prime locations such as Bangalore, Noida, and Chennai are seeing average rental yields of 8-10%. There is great potential for smaller commercial units of about 1,000-1,500 square feet which are in high demand owing to the co-working space revolution. Commercial property yields in the United States are expected to be around 12-15% making REITs a great option to invest in, stated Aman Gupta, Director of RPS Group.
The festive season, with its deep-rooted cultural appeal and financial perks, presents an opportunity for potential investors. Yet, experts emphasise caution — buyers should ensure their investments align with long-term aspirations.