The real estate market is witnessing drastic changes, in an interview with famous Luxury Real Estate Consultant Ashutosh Bhogra (www.ashutoshbhogra.com) we got to know about how the market is moving and what we can expect in the coming times.
During the pandemic, the interest rates were brought down and Govt poured money into the economy by way of various projects that fuelled the economic boom pretty fast. Smarter people bought real estate when the Govt announced these steps and didn’t wait for anything to start investing. Everything seemed grim and they just went ahead and started shopping for properties. They have benefitted the most. Same time a lot of people invested in the stock markets and saw their investments double-triple-quadruple in the next 1 year or so, depending on how and what they invested in.
But once the stock markets hit a high lot of these stock market investors sold off their equity portfolio, or part of it, and bought some properties. These properties had not gone up much yet and were still at the beginning of their boom, let’s say they had gone up by 20-40% from their bottoms, unlike stocks that had skyrocketed already as stock markets go up and down very fast. So these people enjoyed excellent returns from the stocks, sold their stocks and then bought real estate. This real estate then started climbing very fast. For some time the stocks fell and people who had not sold their stocks earlier (waiting for more returns) got stuck in the stock market and watched real estate take off. They missed this real estate rally.
As stock markets stayed down for almost a year, they have gotten tired of it. A lot of them are waiting for the stock market to hit the top again so that they can sell the stocks and finally invest in real estate which after all is REAL. Many hope to just buy a house or a larger apartment and put their money into real estate and also enjoy it.
If stock markets hit higher all-time highs, which I believe they will, these people waiting to sell will finally exit stocks and buy properties propelling real estate higher. Once this starts, others waiting on the sidelines will start buying too as more people want to buy in a market going up for the fear of losing potential profits. This will compound the prices going up and it’ll create a huge wave. This will be the second wave of the Real Estate Bill Market.
With central banks world over increasing the interest rates and selling their bonds, which together will reduce the cash in the market, the stock markets will have to crash down. It’s either this or hyperinflation and no government can risk hyperinflation. So next few years will be bad for stock markets globally most likely. This should keep Indian stock markets also weak. At the same time, India is still plush with cash and demand in India is way beyond the supply available for EVERYTHING. If you don’t believe this, check the market for cars, houses, hotel rooms, and luxury items etc. etc. All this cash will leave real estate as the best option as at least it is real and gives some rental returns. Add to that the love of having your own home, property being a status symbol, and loads of black money looking for a safe haven. All this should keep property slowly rising and at least not going down despite higher interest rates in India.
This is not investment advice and please do your due diligence and buy or sell anything at your own risk. These are simply my viewpoints based on extensive study and research and I do not take any responsibility for any loss or profits you make based on this.
Hope you do what’s best.
(The author of this article, Mr Ashutosh Bhogra is a luxury real estate consultant- Contact: 9818968866)