Niranjan Hiranandani, MD, Hiranandani Group &Vice Chairman, NAREDCO
Home is not only crucial for human existence but for wealth generation as well. The significance of owning a home has multiple advantages to the owner or an investor. Buying a house is not just a reflection of an economical but also a huge emotional and sentimental investment. It is a wealth generating asset in perpetuity to be cherished by generations.
Owning a house has a dual objective i.e., right to use or invest with stable rental income and capital appreciation in the long run. A great opportunity lies to invest in the property of branded developers with proven track record, offering attractive ROI as compared to other volatile asset classes. Today, the investors are advised to park their disposable income in home buying to rent it out for better income yields. In order to encourage this, the Model Tenancy Act was introduced by the central government that will further formalize and bolster rental housing in India. It is a great window of opportunity for the investor community to leverage the strength of the Indian housing market, pegged to grow at 10% CAGR.
Post- Covid, there is an emergence of a new segment of home buyers i.e., the next gen millennials. Alongside, there is a set of home buyers with aspiration to upgrade to bigger luxurious apartments in the new normal. There is a skewed interest towards well planned residential complexes having proximity to commercial developments. Embedded with best social fabric, inclusive of branded education, healthcare, retail and recreational amenities, with walk to work advantage, these residential developments have garnered traction in order to uplift mental and physical wellness quotient. A well-balanced lifestyle, social distancing, safety, and hygiene are new parameters of home buying that are offered in a holistic development in suburban locations. This twin set of home buyers have resulted in creation of a new trend for investors- ‘buy to rent’.
Today, real estate as an investment, has caught on in a big way, be it planning for future or retirement. The three major benefits – capital appreciation; monthly income (rental) and tax benefits on EMI payments – make homebuying a smart investment decision. This enables the investor to address certainty of future income, future job prospects, family responsibilities, economic migration and so forth. The aspect of wealth creation is met by pay-out (EMIs) being adjusted against steady rental income.
For home investment, age is no longer a barrier. It is the scope of job stability and growth curve that drives the decision. Property is a more secured asset and a great instrument to beat inflation, which makes it a value-add component of investment portfolio. Buying real estate has proved to be beneficial for everyone, be it end user or investor. Over the years, it has proved to be the largest asset class in the world, which ensures profitable returns over a period of time. As an asset, real estate holds a high utility value for the beholder.
Residential real estate today offers a number of options for investors to choose from – studios, apartments, plots of land, independent floors or bungalows across different geographies. With festive bonanza, supplemented with low home loan interest, choice of inventory, innovative flexi payment schemes and deal sweeteners by the developers, for smart investors, it is the right time and right choice to invest in a home.