Real Estate goes through cycles of 7-10 years (Calendar year returns of NHB Housing Price Index)
2002-2012 – 15% CAGR
2023-2023 -5% CAGR
2002-2023 -10% CAGR
WHEN you enter “Real Estate Cycle” is a key driver of long term returns
Real estate has beaten Inflation over longer time frames provided the entry is right. But the real estate has underperformed equities over long time frames.
Over the Long Term (15-20 years) Real Estate has provided returns above inflation .Long Term Return Expectation = Inflation + 2-4% but Real Estate also goes through cycles (7-10 years of up-cycle followed by down-cycle)
Indian Equities have outperformed all other asset classes over the long run; ~15% returns over 20 years while Mid & Small Caps have delivered 16-19% returns in the last 15 years
Indian Equities multiplied 16 times in 20 years while in real estate , it has grown by only 5-6 times. Investing in Indian Equities with a time frame of 7+ Years has led to a good experience.
Robins Joseph , SEBI Regd Investment Adviser , Certified Financial Planner. Founder of MyGuide2Wealth (www.myguide2wealth.com) based in Noida specializing in wealth, investment, retirement services with clear aim of Spreading financial literacy and advocating on India’s strong equity story.
Disclaimer: The investment advice provided by the author is for informational purposes only. We take no responsibility for any losses or damages resulting from the use of this information.
