Inflation, a persistent concern within the financial world, challenges investors seeking to preserve and grow their wealth. In India, with the inflation rate falling to $4.85% in March 2024, flexibility becomes paramount. Against this economic backdrop, real estate stands out as a reliable safeguard against inflation’s impact – diversification is key.
Diversification Unveiled
A strong investment portfolio demands a variety of assets to navigate market fluctuations. Real estate, a tangible asset with a history of resilience, is a smart way to diversify your holdings. Its ability to hold value amidst inflation makes it essential to any well-lbalanced investment approach.
Real Estate’s Steadfastness
The All-India House Price Index (HPI) reveals an average annual growth rate of approximately $10.1% over the past decade. Historically, real estate returns in India have appreciated with 20-year returns averaging $9%. India’s housing inflation rate rose to $5.9% year-on-year in December 2023, signalling continued appreciation in property values. Even with potential challenges like liquidity constraints and project delays, India’s real estate market remains robust. Rapid urbanisation, population growth, and increasing GDP per capita fuel positive projections for real estate, with residential sales expected to grow in 2024.
Investment Options Beyond Direct Ownership
Real estate investment isn’t limited to just owning property. Real Estate Investment Trusts (REITs) are a common option, but the financialization of real estate has expanded accessible products like Alternative Investment Funds (AIFs). Category II AIFs, especially, have seen dramatic growth driven by interest from High Net Worth Individuals (HNIs) and Ultra High Net Worth Individuals (UHNs).
Success Through Strategic Partnerships
Navigating the real estate investment landscape demands careful planning and guidance. Partnering with experienced investment advisors will tailor insights to your risk tolerance and goals, ensuring your portfolio thrives throughout market shifts. including real estate in your investments is a strategic inflation hedge, protecting your wealth and building a strong financial future. Its resilience and inflation-proof returns solidify real estate as a reliable asset in a growing economy, offering a path to lasting financial success. Category II AIFs are projected to maintain growth at $29% over the next 3 years, highlighting the continued potential of real estate as a powerful investment tool against inflation.
SOURCE: INTEGROW RESEARCH
