Covid 19 02 May 2020

Is Real Estate Indeed The Best Investment Option – If So, Why?

Despite the economic slowdown affecting the real-estate sector, it is still the preferred investment module. On account of the Covid-19 lockdown, things are likely to change, albeit for a short term period. As compared to other options like investing in gold and other such fixed assets, the real-estate sector is a lot more dynamic and is considered far more stable.

Why real-estate is the best option?

• Most of the other assets are volatile and is considered a safe bet as it remains invested for a longer-term.
• As of now, property prices are at the lowest, but across most of the cities with the government stepping in and announcing stimulus packages, both investors and end-users are expecting a stable market in the near future.

How other assets are fairing?

If you look at the overall performance of gold for the past one month, it will come to your notice that consumption has slowed down. By and large, it is being mostly sold for cash.

When it comes to the global stock market, the performances are down by an average of 38% in 2020. As such, billions of dollars are being lost on a day to day basis.

Investment Pattern for households in India & China

Let’s take a look at the investment pattern of households in countries like China and India. This will help us a lot to understand their economy and how they are performing at the moment.

• In India, nearly 84% invest in real estate and physical goods. The rest of the 11% makes an effort to invest in gold and the remaining 5% in financial assets.
• When it comes to China, nearly 77.7% of people living in cities invest in real- estate. While 11.8% invest in financial products, the remaining 1% opt for stock markets.

The metrics do give a clear picture of the investment pattern and this helps us to understand how people in both countries consider it reliable to invest in the real- estate sector.

Is the Chinese real estate sector more organized?

The size and scale of the Chinese real estate market are vast and some of the top developers such as Evergrande, Country Garden, Vanke, and Sunac have seen tremendous growth in the past few months.

Moreover, in an effort to reach out to the larger audience, real- estate development is making an effort to bring about some desired changes. On this front, some of the initiatives undertaken are as follows:

• Availability of online booking app
• Sales promotion across all levels
• VR tours
• Live broadcasting of all properties

Judging by the innovations taking place and because of the options that are in place, the real estate market in China seems a lot more organized.

What makes Dubai one of the best destinations for investment?

As far as Dubai is concerned, it now happens to be one of the best destinations for real-estate investment. Some of the reasons that make it an ideal destination of choice are as follows:

• One of the safest place and the best-rated government
• Long term residency visas and 100% foreign ownership of businesses
• Robust health care along with mandated health insurance
• Strategically located and one of the major business hubs
• Home to a diversified economy
• Access to affordable and convenient freehold real- estate with high ROI & yields
• Tax-free and VAT free
• Currency( Dirham) is pegged to Dollar