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Why invest in real estate in India?

Why invest in real estate in India?

March 02, 2023

As an industry, the real estate sector in India has considerable significance in the Indian economy as it contributes about 7-8 per cent to the Indian gross domestic product (GDP) and is expected to contribute to about 14 per cent by 2025-26. By 2030-31, the Indian real estate industry is expected to be a USD 1 trillion industry, becoming the third largest globally. It is also the third largest employer (after agriculture and manufacturing) in the country and presently employs over 51 million people.

Even from an individual's investment perspective, real estate property has traditionally been one of the safest long term investment bets not just from a growth perspective, but also to build a protective safety net for your family's future.

The revival and resurgence of the real estate industry post the pandemic has been one of the most compelling stories for the growth of the Indian economy. Correction in stamp duty rates, lower rates of interest on loans, and consumers investing their pent-up savings has resulted in a V-shaped recovery for the realty sector in the past two years in India. This holds true not only for the domestic buyers, but also for the NRI investors who have invested over USD 13 billion in India real estate market in the past one year. Testimony of this buoyant mood are the months of May and June 2022, that have recorded the highest number of property registration in the last 10 years, showcasing a solid foundation of potential growth for the realty sector.

Today even an average Indian is looking for different options to create wealth and live a financially stable life. Gone are the days when people relied only on their salary, pension, and traditional savings to secure their retirement future. The people nowadays are interested to invest their money gainfully and create multiple sources of income outside of their jobs. Therefore the Indian real estate market is thriving and has become a part of many successful investment portfolios because of its high return on investment (ROI) value. As per a report, 77% of the total assets of an average Indian household are real estate. Therefore, if you want to grow your wealth, you too should consider a real estate investment in india.


Real Estate is a Safe Investment Option:

Stock markets, cryptocurriences, gold markets keep on fluctuating. As compared to these investments a real estate investment can be a lot safer and that is because the sector has been witnessing a growth in the last few decades, especially in the last few years because of the implementation of RERA, lower home loan interest rates, etc. Your surplus funds can be invested in a property. It is less susceptible to frequent fluctuations and there are minimal chances of theft. Furthermore, the longer pricing cycle in real estate as compared to other assets with shorter pricing cycles means that real estate prices are more predictable, steadier and have traditionally appreciated over time.


The Indian real estate market is growing at a fast pace. The market for real estate was ₹12,000 crores in 2019 and is expected to rise to ₹65,000 crores in 2040. It's contribution is likely to be almost 13% of the country's GDP by 2025.

Moreover, with rapid construction of residential and commercial spaces in several cities around the country, including tier 2 and tier 3 cities, you can benefit from exemption on long-term capital gains tax on investment in a residential property under Sections 54 and 54F.


With the global attention shifting to India from China, a real estate investment can be a profitable option in the current scenario. With more and more global companies shifting to India, there is an expected surge in employment in the country. With this influx of money, more and more people are likely to purchase homes and increase the demand for real estate.


Real estate values have traditionally always increased over time. With a good investment, one can earn an enormous profit when you sell it. Rents also tend to increase with time, leading to higher cash flow. It is historically proved that the longer you hold onto your real estate investment, the more profit you will make out of it. The realty market always recovers from crises that cause price appreciation to slip temporarily. Following even the most uncertain times, prices always return to normal, and the appreciation is back on track. Real estate offers better control over one's investment. Property being a tangible asset can thus be leveraged to capitalize on numerous revenue streams while enjoying capital appreciation.


The returns on investment in real estate traditionally surpass the rate of inflation, offering you better profits without much risk as compared to other high reward options like direct equities, etc. Moreover, the process of investment in real estate is also quite streamlined with legal procedures like registrations and stamp duties well in place, thereby reducing the risk of loss due to frauds or scams.


Cash flow is the net income from a real estate investment after mortgage payments and operating expenses are covered. Real estate investments enable you to generate a considerable amount of cash flow, through rental income. A monthly rental income is a great way to build a good passive income and offers great long-term financial security to the investor. If you are someone who is about to retire, income from your rental properties can ensure that your retirement life is hassle-free. In Mumbai, the rental yield on residential properties can be between 2-4%, and that on commercial properties can be as high as 6-9%.


Tax deductions on Real Estate offset income and reduces overall taxes payable as the government offers several tax breaks for property depreciation, insurance, maintenance and repair expenses, legal fees and even interest paid on a mortgage. If you have opted for a home loan, under section 80C, you can save up to INR 1.5 lakh on the principal amount. Similarly, as per section 24, you can also save up to 2 lakhs on the interest payable. Also, if you are a first-time homebuyer, you can save up to Rs. 1.5 lakh on the principal amount under Section 80 EEA. In this way, you can make investing in real estate more affordable and also reduce a significant amount of taxable income. Real estate investors also get lower tax rates for their long term investments.

Also one can get exemption on the capital gains too, if one decides to sell the property and invest in another one within one year. Section 54 of Income Tax Act makes provision for this. Reasonable costs of owning, operating and managing property are easily deductible.


The interest rates on Home Loans are dependent upon the credit tenure. The longer the time period for repayment, the higher the interest rate. While the RBI did increase the repo rates a few times in the past few months, the current interest levels are still fairly low. This makes it the ideal time to invest in real estate as the interest rates are likely to increase in the next 12-24 months. Customers can score a massive bargain by taking advantage of the current lower interest rates on home loans.

Raheja Realty, a Raheja Group company is one of the best real estate developers in India, that has been tirelessly working for the past 66 years to bring you exemplary residential projects and townships, as well as commercial and business complexes that have turned out to be exceptional investment destinations. Every real estate project undertaken by K. Raheja Realty has been built with core focus on innovation, exceptional quality, emphasis on design, planning, ambiance, precision craftsmanship, functional efficiency, and sustainability. All the projects, irrespective of whether they are integrated residential townships, or commercial buildings and office spaces as well as futuristic business premises reflect a rare combination of aesthetics, luxury, and workmanship at their best. India's leading real estate developers, with expertise across multiple asset classes, K.Raheja Realty has completed over 2000 successful projects, covering over 20 million square feet of development.It has a strong presence nationwide, including cities like Mumbai, Pune, Chennai, Bangalore, and Coimbatore.

Raheja Realty, a Raheja Group company that is considered one of the best real estate developers in India, has developed innumerable projects that have been sound investments and continue to attract buyers and investors alike. The real estate projects that continue to offer exceptional return on investments, amongst other include residential complexes and integrated townships like Raheja Classique, Andheri West with its luxurious 3 & 4 BHK flats; Raheja Interface Heights, Malad West with its exquisite 2 & 3 BHK luxury flats; Raheja Residency, Malad East with its grand 2 & 3 BHK ready-to-move-in flats; Raheja Gardens, Wanwadi Pune with its ready possession 3 BHK luxury apartments.

Raheja Realty's commercial buildings and futuristic business premises include the massive 2.25 million square feet commercial building, Infinity IT Park, at Goregaon East. Its future-ready office spaces and connectivity make your work-life balance the envy for all. Interface IT Park by K. Raheja Realty, is a 4.7 million square feet commercial building that stands tall with pride in one of Mumbai's most coveted locations, Malad West. The future-ready offices spaces, congestion-free location, easy access to all kinds of conveniences, excellent connectivity by road and upcoming metro rail, & ample parking spaces makes Interface IT Park one of the most sought-after commercial building in Mumbai.

Infiniti – Andheri, and Infiniti – Malad, divisions of K Raheja Realty, are iconic and best malls in Mumbai. They are Mumbai's best retail, entertainment & lifestyle destination that constantly surprise and stimulate visitors with their vibrant mix of retail and entertainment concepts. Infiniti Malad houses 950 seater multi-cuisine food court spread across an area of 35,000 sq. ft with more than 40 dining and café selections to choose from. It is the first mall in India to have a 360-degree roller coaster ride for children and adults alike, that too in the closed confines of the air-conditioned mall.Infiniti Mall also has PVR Cinemas, India's leading movie multiplex that offers the ultimate experience of watching movies in the comfort of reclining chairs and digital screens. Whereas, Infiniti Mall Andheri is located conveniently on the Link Road near the Lokhandwala Complex, and hosts over 65 leading Indian and International brand stores.


The Indian real estate market is booming and being a part of its growth can shower favourable returns in the future. So, ride this tide to secure your future, live a luxurious life, or do roaring business and leave a legacy behind for your loved ones.

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