Traditionally, real estate has been a preferred investment of the affluent. But in the past few years, returns from real estate have taken a hit. Here’s what experts say on the prospects of the sector over the next 5 years.

LOVAII NAVLAKHI,
chief executive officer, International Money Matters Pvt. Ltd

There are risks in this asset class: dubious title, contentious litigation, lack of liquidity and long duration from intent to buy to completion of sale. The current market scenario could also play a role in keeping the prices subdued for some time. The decision to invest in this asset class must be taken after determining overall asset allocation, ensuring there is no immediate need for liquidity.

SHISHIR BAIJAL,
chairman and managing director, Knight Frank India

Price growth in residential properties would be considerably muted compared to the previous 5 years. These properties will no longer be a speculative investment and will have to compete with other investment avenues. The price growth of real estate over the last few years has been averaging 2-3%, so in real terms there has been a time correction of prices already.

RAJESH SALUJA,
managing director and chief executive officer, ASK Wealth Advisors

From an investment point of view, real estate may not be a good option now. Rental yields are low, borrowing cost is still on the higher side, and any substantial appreciation in capital values is not expected in the near future. Property prices increased a lot in the last market cycle (8-10 years) and the next cycle of appreciation is some time away. Hence, as of now one can stay away.

SAMIR JASUJA,
founder and chief executive officer, PropEquity

The real estate sector, especially housing, is going through a critical transition phase, which will weed out the fly-by-night developers. The worst for Indian realty is behind us and prices, which have been on correction trajectory for long, have now almost bottomed out. What our data and research suggests is that in the next 3-5 years, real estate sector will again start moving up.

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