Should you invest in property at time of high inflation? Check what experts say

Investing in real estate is never an easy decision especially when you are not sure about return and there is a risk of inflation. The real estate market has seen a jump in recent times and according to the latest ANAROCK data, total sales in the top 7 cities are expected to exceed 3.6 lakh units in 2022. In the previous peak year of 2014, the top 7 cities saw 3.43 lakh units sold. The January-September period of 2022 saw housing sales and new launches surpass the full-year readings of 2019 by approx 2.73 lakh units sold in 9M 2022 and new launches at 2.65 lakh units. This indicates a rise in housing demands. But how good is that when it comes to better returns?

Manoj Gaur, President of Credai NCR and CMD, Gaurs Group, said that real estate remains one of the safest places to invest today. "From the perspective of an end-user, buying a property during times of inflationary pressures makes good sense, because while the rental will continue moving upwards, EMIs are unlikely to go up. Therefore, if a person is eligible for a bank loan then one should consider making the move, whether it is buying a first or a second home or for that matter investing in a commercial property. Besides, real estate has a proven track of providing consistent returns in the long term," said Gaur.

Suren Goyal, Partner, RPS Group, said that inflation is, by and large, an element of a modern market economy, and witty financial investors hedge their wagers on exceeding resources, regardless of inflationary strain. "There is an idle interest for reasonable housing in India, which would principally raise the request. What's more, we are seeing an enormous investment by the government in building streets, rail and air, which will catalyze the general Indian housing real estate market. Real estate has forever been viewed as a protected interest in India, and no measure of vulnerability because of inflation could in fact remotely put a squeeze on its worth. Generally speaking, land returns have outflanked the profits gotten from other asset classes," said Goyal.

Industry experts also said that land has demonstrated to be a steady investment during inflation and whether it's a solitary family home, multifamily or even business land, numerous financial investors are focusing harder on this asset class for its stability and tax breaks which work wonders for regulating profits.

"Investing in real estate is a major decision since it turns into a more helpful and well-known store of significant worth in the midst of inflation while creating expanded rental pay. When it comes to investment in land, one should consider the requirement for liquidity, their expense technique and furthermore the time they can commit to dealing with the investment, which will in general be more concentrated than a stock portfolio. In any case, when costs are rising, the property can frequently be a great spot to have your money," said Subhash Goel, MD, Goel Ganga Developments.

Experts said that not only Indian but even foreign investors are showing interest in the Indian housing market and with the government's endeavour, this investment is likely to witness an increase. "Contrasted with potential, inflation is losing this race by far. The appreciation for your business property rates will balance the impacts of inflation for you. Generally, land is typically viewed as inflation support. As the buying influence of cash descends, land safeguards financial investors against that," said Ankit Aggarwal, MD, Devika Group.

Aditya Kilachand, CEO & Founder, Avas Wellness, said that he sees Indian real estate at the crest of a multi-year bull phase. "Real estate sector is poised to see exponential returns over the next 5 years as the connectivity and infrastructure push by the government plays a crucial role. I expect land prices in some regions to more than double over the next 3-4 years, comfortably beating inflation estimates," said Kilachand.

Experts said that despite a hike in interest rate by 140 bps this year, home loan rates remain lucrative and customers/investors will look to take advantage of the same.