Professionals in India prefer investing in real estate, survey shows

Written by Ray Clancy

Tuesday, 14 December 2010 10:25

The majority of professional people in India prefer to invest in real estate as a long term prospect and are conservative in their outlook, according to a new survey.

As far as investment is concerned, Indians like to play it safe, and some 65% of working individuals in urban India prefer real estate as they see it having higher future returns. They also view other investment options like the stock market, equity, mutual funds and gold as risky.

Most believe that investing in gold, National Saving Certificates and fixed deposits is passé and part of an ‘old school; style of investment. Younger investors favour real estate, mutual funds and life insurance, the survey by the Associated Chambers of Commerce and Industry of India shows.

Under the aegis of ASSOCHAM Social Development Foundation (ASDF), it asked almost 1,500 directors, officers, executives, teachers, professionals in the public sector and multi-national companies as well as self employed traders, lawyers, doctors and financial experts about their preferred investment options for savings.

Around 975 participants from Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Chandigarh, Lucknow, Hyderabad, Pune and Jaipur approved of investing in real estate and felt that Indian real estate had huge prospects in the commercial, hospitality, retail, manufacturing, healthcare and housing sectors.

‘Real estate not only saves the working urban population from paying monthly house rentals but also provides them with tax benefits while repaying the loans along with interest component for quite long. Hefty escalation in price with growth and development in the area is another significant factor that attracts working individuals and propels them to invest in property,’ said ASSOCHAM secretary general D.S. Rawat.

He added that cost escalation with growth and development in the area was another factor that attracts professionals towards investing in property.

Of the 65% interested in investing in real estate some 40% said that they preferred to invest in property in tier II and tier III cities as they offer affordable and easy availability of land, coupled with better connectivity, infrastructure and other basic facilities.

About 20% of respondents preferred investing in gold, considering it a trusted and long lasting store of value in possession, which can be encashed any time. Only about 15% of respondents preferred investing in mutual funds, stocks, FDs and bonds.