Stocks vs real estate: Where should one invest in India? What experts say

Whether buying stocks or investing in real estate, both are a well-known investment option. Whether it's planning for retirement, saving for your kids higher education, buying your dream car or planning your dream vacation, individuals need a well researched investment strategy.

Here we try to understand the reasons to invest in stocks vs. real estate

Realty investment is a long-term and wealth-building asset accumulation which possesses a strong market hold and the possibility of a stable price appreciation in a long run. Manoj Gaur, President Credai NCR and CMD, Gaurs Group said it’s a rare occurrence that the buyer is unable to sell it at the desired market price even if he or she wishes to sell their property in later stages because property prices rise in the wake of recession or other economic conditions. The rising wealth generation and easy availability of home loans have also brought the middle class and service class people to the real estate investment arena. The pandemic has also boosted positive sentiments of people towards real estate ownership. 

Stocks might offer initial monetary profits, which evaporate quickly under one or other cash outflows, which is why it sees mercurial divestments overnight. Real estate offers long-term security and high returns, while stock proves to be an unreliable and volatile form of investment characterised by market fluctuations and stock, he added.

Investing in real estate proves to be a much more solid and stable source of income, promising high returns on investments.

Ashwinder R. Singh CEO, Residential Bhartiya Urban said that off late, Rental Housing has emerged as a robust alternative source of wealth generation, with demands for rented homes, flats, and apartments rising owing to a return to work from office model year-on-year, especially in Delhi NCR. Even the rental prices have shot up quarter-by-quarter based on healthy demand and limited supply formulae, whereas stock prices are volatile and risk driven, dominated by several market forces. Especially after weathering a pandemic characterised by steep financial losses, people are more likely to invest in safe and stable investment models like real estate.

According to Sanchit Bhutani, Managing Director, Bhutani Grandthum, first and foremost, the investment by and large is recession-free. 

“An investment in real estate yields definite and high returns. Secondly the buyer can avail finance for almost 80% of the investment in properties, from reputed banks. If it is their first home, one can save on rentals or in the case of the second / third home, get rent, which would equal to the EMI amount in 3 to 4 Years. Lastly, a property is a highly rated asset, which enhances the financial stature of the person and brings other associated benefits such as high net worth, improvement in credibility in the books of the financial institutions, etc,” said Sanchit Bhutani.

Besides, the equity market has already reached its seam while in the case of realty sector, all the due diligence is done by a financial institution for enhanced credibility, further, with RERA, the probability of the failure of a project has almost been eliminated. No such guarantee can be taken for the equity market, he added.