Real estate top investment avenue in non-metros

Real estate has emerged as the most preferred investment avenue for working professionals in non-metro centres vis-à-vis bullion and stock market.

Realty has topped the preference chart as it is considered a safer investment option compared to other instruments and the booming real estate sector in Tier-II towns of the country.

Almost 60 per cent of respondents in a random survey conducted by Associated Chambers of Commerce and Industry of India (Assocham) in seven Indian non-metro cities preferred realty, followed by bullion and stock market at 20 per cent and 15 per cent, respectively.

In the survey conducted in Lucknow, Jaipur, Ahmedabad, Surat, Patna, Ranchi and Bhopal during October 2010-February 2011, the respondents said Indian realty had huge prospects in sectors like commercial, housing, hospitality, retail, manufacturing and healthcare.

Interestingly, many opined that investing in National Saving Certificates (NSC), bank fixed deposits (FD), Post Office Monthly Income Scheme (MIS), bonds and debt instruments represented ‘old school’ of investment. They said prudent investors were trying to strike balance vis-à-vis exposure in realty, gold deposit schemes, mutual funds and life insurance for financial security.

The sample size was 7,000 (1,000 in each city) comprising directors, executives, teachers, professionals employed in public sector undertakings and multinational corporations, besides self-employed traders, lawyers, doctors and financial experts.

The remaining five per cent preferred investing in miscellaneous traditional investment instruments. The study was conducted under the aegis of Assocham Social Development Foundation (ASDF).

In Lucknow, 44 per cent preferred investing in real estate as it guaranteed higher returns with minimum risk compared to stock market, equity, mutual fund and gold.

“Realty being an investor-driven market is one of the most profitable industry as it saves the working urbane populace from paying monthly house rentals and provides tax benefits while repaying loans along with interest for quite long,” Assocham General Secretary D S Rawat said releasing the findings of the survey.

The survey also found that realty sales were gradually drying up in metros, but was fairly steady in Tier-II towns.